EXHIBIT 10.14
CAPITAL AUTOMOTIVE L.P.
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AGREEMENT FOR CONTRIBUTION OF INTERESTS
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November 24, 1997
TABLE OF CONTENTS
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Page
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I. CONTRIBUTION OF INTERESTS..................................... -1-
1.1 Certain Definitions.................................. -1-
1.2 Contribution......................................... -3-
1.3 Consideration for Contribution....................... -3-
1.4 [Intentionally omitted].............................. -3-
1.5 Subject to Partnership Agreement..................... -3-
1.6 Capitalized Terms.................................... -3-
II. ADJUSTMENTS................................................... -3-
2.1 Unit Adjustment...................................... -3-
2.2 Adjustments with Respect to Units.................... -4-
III. REDEMPTION OF UNITS........................................... -4-
3.1 Redemption Right; Limit on Redemptions............... -4-
3.2 Registered Shares.................................... -4-
IV. OPERATION OF PROPERTY THROUGH CLOSING......................... -4-
4.1 Business Practice.................................... -4-
4.2 No Sale or Encumbrance............................... -5-
4.3 Leases, Service Contracts and Management Contracts... -5-
4.4 Termination of Leases; New Company Leases............ -5-
4.5 Compliance........................................... -5-
4.6 Notice of Inaccuracy or Incompleteness............... -5-
4.7 Access............................................... -6-
4.8 Insurance............................................ -6-
4.9 Fulfillment of Obligation............................ -6-
4.10 Financial Statements and Reports..................... -6-
V. STATUS OF TITLE TO PROPERTY................................... -6-
5.1 State of Title....................................... -6-
5.2 Preliminary Evidence of Title........................ -6-
5.3 Title Defects........................................ -8-
VI. CLOSING PRORATIONS AND ADJUSTMENTS............................ -9-
6.1 Prorations and Adjustments........................... -9-
VII. CLOSING -10-
7.1 Closing Date......................................... -10-
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7.2 Closing Documents........................................ -10-
7.3 Conditions to the Partnership's Obligation to Close...... -14-
7.4 Conditions to the Contributor's Obligation to Close...... -16-
7.5 Transaction Costs........................................ -16-
VIII. CASUALTY LOSS AND CONDEMNATION...................................... -17-
8.1 Casualty................................................. -17-
8.2 Condemnation or Taking................................... -17-
IX. REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTORS.................. -18-
9.1 Organization............................................. -18-
9.2 Authority................................................ -18-
9.3 Interest in Contributed Properties....................... -18-
9.4 Investment............................................... -19-
9.5 Title to the Properties.................................. -20-
9.6 No Defaults.............................................. -21-
9.7 No Litigation; No Condemnation........................... -21-
9.8 No Violation............................................. -21-
9.9 Required Obligations..................................... -22-
9.10 Condition of Properties.................................. -22-
9.11 Warranties............................................... -22-
9.12 Utilities................................................ -22-
9.13 Zoning................................................... -22-
9.14 Improvements............................................. -22-
9.15 Environmental Matters.................................... -23-
9.16 Insurance................................................ -25-
9.17 Management............................................... -25-
9.18 Compliance............................................... -25-
9.19 Leases; Rent Rolls....................................... -25-
9.20 Service Contracts; Management Contracts.................. -27-
9.21 Permits.................................................. -27-
9.22 Financial Statements..................................... -28-
9.23 Undisclosed Liabilities.................................. -28-
9.24 Contracts................................................ -28-
9.25 Tax Matters.............................................. -28-
9.26 Employee Benefit Liabilities............................. -28-
9.27 [Intentionally Omitted].................................. -28-
9.28 Taxes.................................................... -29-
9.29 Special Filings.......................................... -29-
9.30 [Intentionally Omitted].................................. -29-
9.31 Books and Records........................................ -29-
9.32 No Brokers............................................... -29-
9.33 All Material Information................................. -29-
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9.34 Survival of Warranties................................... -30-
X. [INTENTIONALLY OMITTED]............................................. -30-
XI. REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP COMPANY AND THE
PARTNERSHIP......................................................... -30-
11.1 Organization, Good Standing and Qualification............ -30-
11.2 Authorization............................................ -30-
11.3 No Violation............................................. -31-
11.4 Public Offering.......................................... -31-
11.5 Tax Status............................................... -31-
11.6 No Litigation............................................ -31-
11.7 No Brokers............................................... -31-
11.8 Survival................................................. -31-
XII. COVENANTS........................................................... -32-
12.1 Covenants of the Company and the Partnership............. -32-
12.2 Covenants of the Contributors and the Contributing
Entities................................................. -34-
12.3 No Claim Against Contributed Property.................... -35-
12.4 DRO Election; Bottom Guaranty Election................... -35-
XIII. DUE DILIGENCE PERIOD................................................ -37-
13.1 Due Diligence Period..................................... -37-
13.2 Access to Properties and Materials....................... -37-
13.3 Adjustment Following Due Diligence....................... -37-
XIV. DEFAULTS AND REMEDIES............................................... -38-
14.1 Indemnification by Contributors.......................... -38-
14.2 Remedies................................................. -39-
14.3 Indemnification by the Company and the Partnership....... -40-
14.4 Indemnification Procedures............................... -40-
XV. MISCELLANEOUS....................................................... -43-
15.1 Assignment............................................... -43-
15.2 Entire Agreement......................................... -43-
15.3 Notices.................................................. -43-
15.4 Governing Law............................................ -45-
15.5 Litigation Costs......................................... -45-
15.6 Counterparts............................................. -45-
15.7 Offer and Acceptance..................................... -45-
15.8 Arbitration.............................................. -46-
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EXHIBITS
A. Partnership Agreement
4.4 (a) Form of Company Lease
4.4 (c) Guaranty and Subordination Agreement
7.2.1(i) Investor Questionnaires
7.2.1(p) Lender's Estoppel Certificate
7.2.1(q) Opinion of Contributor's Counsel
7.2.2(f) Opinion of Company Counsel
SCHEDULES
DISCLOSURE SCHEDULE
I. Contributors (Names and Addresses)
1.2 Schedule of Properties; Ownership Interests in Properties
and Contribution Amounts
1.3(a) Schedule of Units Issued in Consideration for Each Property
1.3(b) Mortgage Debt
4.1 Prior Occupants
4.4(b) Guaranties
5.1 Permitted Exceptions
9.6 Material Defaults
9.13 Zoning
9.15.5(a) The Treatment, Storage and Disposal Locations for Substances
of Concern
9.15.5(b) Storage Tanks
9.15.5(c) Existence of Asbestos
9.15.9(f) Environmental Permits and Authorizations
9.16 Insurance
9.19 Lease Disclosures
9.19.2 Leases and Rent Rolls
9.19.13 Other Landlords
9.20(a) Service Contracts
9.20(b) Management Contracts
9.23 Assumed Liabilities of Contributors
9.24 Contracts
9.26 Employee Benefit Plans/Employment Contracts/Employee Benefit
Liabilities
12.1.5 Restrictions on Sale and/or Financing of Specified Properties
12.4.5 Limitations on Indebtedness
14.2.1 Indemnitors
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CAPITAL AUTOMOTIVE L.P.
AGREEMENT FOR CONTRIBUTION OF INTERESTS
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THIS AGREEMENT FOR CONTRIBUTION OF INTERESTS (the "Agreement") is made and
entered into as of this 24th day of November 1997, by and among the persons and
entities named on Schedule I hereto consisting of all of the owners of an
interest in any of the Properties listed on Schedule 1.2 (each individually, a
"Contributor" and, if more than one Contributor, collectively, the
"Contributors"), and CAPITAL AUTOMOTIVE REIT, a Maryland real estate investment
trust (the "Company"), having offices at 0000 Xxxxx Xxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxx, Xxxxxxxx 00000 on its own behalf, and CAPITAL AUTOMOTIVE L.P., a
Delaware limited partnership (the "Partnership"), having offices at 0000 Xxxxx
Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000.
RECITALS
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A. The Partnership was formed on November 13, 1997. At the Closing, the
Limited Partnership Agreement, as amended and restated, will be substantially in
the form appended hereto as Exhibit A (the "Partnership Agreement"). The
Partnership is intended to result in an umbrella partnership real estate
investment trust in which the Company shall be the sole general partner (the
"General Partner") and shall hold the number of Units (as hereinafter defined)
of partnership interest set forth in Schedule A to the Partnership Agreement.
B. Each Contributor has such interest in the real property and
improvements as is set forth opposite its name on Schedule 1.2 hereto. Each
Contributor is the legal and beneficial owner of fee simple title to all of the
real property and improvements set forth on such Schedule 1.2 hereto (including
the residual interests in any tenant improvements thereon), which are
individually referred to as a "Property" and collectively, the "Properties."
C. Each Contributor desires to transfer all of its interest in each of
the Properties set forth on Schedule 1.2 to the Partnership in exchange for
Units (as hereafter defined) in the Partnership in the amounts set forth in
Schedule 1.3(a) upon and subject to the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of and in reliance upon the above Recitals,
the terms, covenants and conditions contained in this Agreement, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
I. CONTRIBUTION OF INTERESTS
1.1 Certain Definitions. For purposes of this Agreement:
1.1.1 "Units" means units of limited partnership interest in the
Partnership, including the limited partnership interests held
by the Company and those to be issued to the Contributors
pursuant to this Agreement. The Units to be issued to the
Contributors pursuant to this Agreement are sometimes
referred to herein as the "Initial Units."
1.1.2 "Shares" means the common shares of beneficial interest, par
value $.01 per share, of the Company.
1.1.3 "Initial Shares" means the Shares of the Company registered
under the Securities Act of 1933, as amended (the "Act"),
pursuant to a registration statement on Form S-11 (the
"Registration Statement") to be filed with the Securities and
Exchange Commission (the "Commission") on or about November
1997.
1.1.4 "Affiliate" means with respect to any Person, (i) any Person
that holds direct or indirect beneficial ownership (as
defined in Rule 13d-3 under the Securities Exchange Act of
1934, as amended) of voting securities or other voting
interests representing at least five percent (5%) of the
outstanding voting power of a Person or equity securities or
other equity interests representing at least five percent
(5%) of the outstanding equity securities or interests in a
Person, or (ii) any Person that directly, or indirectly
through one or more intermediaries, controls, or is
controlled by, or is under common control with such Person.
1.1.5 A "Person" shall mean and include natural persons,
corporations, limited partnerships, general partnerships,
joint stock companies, joint ventures, associations,
companies, trusts, banks, trust companies, land trusts,
business trusts, Indian tribes or other organizations,
whether or not legal entities, and governments and agencies
and political subdivisions thereof.
1.1.6 For purposes of this Agreement, the "knowledge" of a party
shall mean the actual knowledge of such party's officers,
senior executives, managing partners, general partners,
majority shareholders, key employees or their equivalents.
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1.2 Contribution. Subject to the terms and conditions of this
Agreement, at the Closing (as hereinafter defined), each Contributor shall
convey and transfer its entire right, title and interest in the Properties
identified on Schedule 1.2 to the Partnership, excluding items of movable
personal property attached to the Property that relate to the business conducted
on the Property and may readily be removed from the Property without material
damage whether or not such items are "fixtures," ("Excluded Personal Property").
The interests and Properties to be transferred as herein provided are
hereinafter collectively referred to as the "Contribution."
1.3 Consideration for Contribution. In consideration for the
Contribution, the Partnership shall issue to each Contributor, or to such
partners and beneficial owners of the Contributor as the Contributor shall
designate in writing (the "Designees"), the number of Units in consideration for
each Property as set forth on Schedule 1.3(a) hereto. The number of Units to be
issued in consideration for each Property (the "Contribution Value") shall be
the quotient of the Contribution Amount for such Property (as defined hereafter)
minus the Mortgage Debt (as defined hereafter) encumbering such Property divided
by the Market Price (as defined hereafter). The parties agree that, as of the
date hereof and as of the Closing Date, each Initial Unit has a fair market
value equal to the initial price to the public of the Initial Shares at the time
and date the Registration Statement is declared effective by the Commission (the
"Market Price"). The Contributors represent and warrant that each Property is
subject to mortgage indebtedness set forth opposite the description of such
Property on Schedule 1.3(b) of this Agreement, which mortgage indebtedness shall
be the principal balance of, plus the accrued interest on, the mortgages
encumbering such Property at the Closing Date (the "Mortgage Debt"). For
purposes of this Agreement, "Contribution Amount" means the acquisition cost of
any Property, as stated on Schedule 1.3(a) plus the amount of the Closing Costs
(as defined in Section 7.5.1), which total shall be used to calculate the number
of Units to be issued to the Contributors at the Closing in exchange for their
contribution of such Property to the Partnership.
1.4 [Intentionally omitted]
1.5 Subject to Partnership Agreement. The Units issued pursuant to
this Agreement shall be subject in all respects to the terms and provisions of
the Partnership Agreement.
1.6 Capitalized Terms. Capitalized terms used in this Agreement that
are not otherwise defined herein shall have, unless otherwise indicated, the
meanings assigned to them in the Partnership Agreement.
II. ADJUSTMENTS
2.1 Unit Adjustment. The number of Units issuable as consideration
for the Properties will be adjusted as follows: (a) to the extent the total
Mortgage Debt on a Property is different from the amount on Schedule 1.3(b)
("Different Mortgage Debt"), an adjustment shall be made to the number of Units
to be issued to the Contributors hereunder, by dividing the total dollar amount
of the Different Mortgage Debt by the Market Price and the quotient thereof
shall be
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the number by which the number of Units issuable pursuant to this Agreement
shall be reduced if the Mortgage Debt exceeds the scheduled amount, or increased
if the Mortgage Debt is less than the scheduled amount; and (b) pursuant to
Sections 7.2.1(o), 7.5.1, 8.1, 8.2, 13.3 and 15.7 of this Agreement, as
applicable.
2.2 Adjustments with Respect to Units In the event of any stock
split, stock dividend, reclassification, recapitalization or other adjustment in
respect of the outstanding Shares prior to the Closing Date, the number of Units
to be issued to the Contributors will be proportionately adjusted so that the
Units will equate to the Shares on a one-to-one basis.
III. REDEMPTION OF UNITS
Anything in the Partnership Agreement to the contrary notwithstanding,
the following provisions shall apply:
3.1 Redemption Right; Limit on Redemptions. The Contributors shall
have the right to require the Partnership to redeem all or a portion of the
Units held by such Contributor (the "Redemption Event") on or after the date
which is two (2) years after the date that the Registration Statement is
declared effective by the Commission (the "Effective Date") in accordance with
and subject to the limitations set forth in Section 8.05 of the Partnership
Agreement.
3.2 Registered Shares. If the Company exercises its option to deliver
Shares pursuant to Section 8.05 of the Partnership Agreement upon a Redemption
Event, the Company shall deliver to the Contributor Shares that have been
registered for resale under the Act pursuant to a registration statement on Form
S-3 (or equivalent form of registration statement then in effect) declared
effective by the Commission.
IV. OPERATION OF PROPERTY THROUGH CLOSING
Through the Closing Date:
4.1 Business Practice. Except as otherwise provided in this Article
4, the Contributors shall continue, or shall cause any Affiliate, tenant, or
third party managing, maintaining or occupying, as the case may be, any of the
Properties as shall be designated by the Partnership or the Company (referred to
herein individually as a "Prior Occupant" and collectively as the "Prior
Occupants") to continue, to manage, maintain and operate the Properties in
accordance with sound and prudent business practices and keep the Properties and
the tangible personal property thereon in good condition and repair, ordinary
wear and tear excepted. The Contributors shall instruct such Prior Occupant not
to make any change in its management, maintenance or operation of the Properties
or in its normal and customary other practices. The Prior Occupants are
identified on Schedule 4.1 to this Agreement.
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4.2 No Sale or Encumbrance. None of the Contributors shall sell,
mortgage, pledge, hypothecate or otherwise transfer or dispose of all, or any
part of any Property or any interest therein, nor shall any Contributor
initiate, consent to, approve or otherwise take any action with respect to
zoning or any other governmental rules or regulations presently applicable to
all or any part of any Property, nor shall any Contributor permit any new
limited or general partners, shareholders or members to be admitted to any
Contributor.
4.3 Leases, Service Contracts and Management Contracts. Except as
provided in Section 4.4, the Contributors shall not, nor shall they cause or
permit any Prior Occupant to, terminate, modify, extend, amend or renew any
Lease (as defined in Section 6.1.3 hereof), Service Contract (as defined in
Section 9.20 hereof), Management Contract (as defined in Section 9.20 hereof) or
enter into any new Lease (other than the Company Lease pursuant to Section 4.4
of this Agreement) or Service Contract without the prior written consent of the
Company or the Partnership; provided, however, that the failure of the Company
or the Partnership to object to any such action within thirty (30) days after
written notice to it by Contributor shall be deemed to reflect the Company's or
the Partnership's consent thereto. Notwithstanding the foregoing, all Service
Contracts and Management Contracts relating to the respective Properties shall
remain in effect after the Closing Date, except for those Service Contracts and
Management Contracts that the Partnership requires to be terminated as of the
Closing Date.
4.4 Termination of Leases; New Company Leases. Prior to the Closing
Date the Contributors shall cause the termination of all Leases. Simultaneously
with the execution of this Agreement, the Contributors shall cause the Prior
Occupant of each Property, or an Affiliate thereof, to execute and deliver to
the Partnership an occupancy lease with the Partnership for each of the
Properties substantially in the form attached hereto as Exhibit 4.4 (a)
(referred to hereafter individually as a "Company Lease" and collectively as the
"Company Leases"), on terms and conditions (including Rent (as defined in such
Company Lease)) acceptable to the Partnership. The Base Annual Rent (as defined
in the Company Lease) called for under the Company Lease as set forth on the
Exhibits and Schedules attached to the Company Lease shall be increased by the
proportion that the Closing Costs (as defined in Section 7.5.1) bears to the
acquisition cost of such Property as stated on Schedule 1.3(a).The effective
date of such Company Leases shall be the Closing Date. The Company Leases shall
be guaranteed as set forth on Schedule 4.4(b) using a Guaranty and Subordination
Agreement substantially in the form attached hereto as Exhibit 4.4(c).
4.5 Compliance. None of the Contributors shall knowingly take or fail
to take any action that will cause the Properties to fail to comply with any
federal, state, municipal and other governmental laws, ordinances, requirements,
rules, regulations, notices, codes and orders, or any agreements, covenants,
conditions, easements and restrictions currently in effect relating to the
Properties.
4.6 Notice of Inaccuracy or Incompleteness. The Contributors shall
promptly give written notice to the Company of the occurrence of any event of
which Contributors
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have knowledge and which may adversely affect the completeness or accuracy of
any representation or warranty made or to be made by Contributors under or
pursuant to this Agreement.
4.7 Access. The Contributors shall cause the Company and its
representatives to have reasonable access to the Properties, subject to the
prior rights, if any, of any Prior Occupant; provided, however, that without the
consent of the Contributor, the representatives of the Partnership shall not
disclose to any Prior Occupant the existence of this Agreement or the
transactions contemplated hereby.
4.8 Insurance. The Contributors shall cause the existing insurance
coverages on the Properties and the business of the Contributors to be
maintained in full force and effect at the Closing Date.
4.9 Fulfillment of Obligation. To the extent any Contributor is
obligated, pursuant to any contract, agreement, covenant, lease, including any
Lease, or other understanding entered into prior to the date hereof with any
Prior Occupant, governmental subdivision or any other third party, to effect any
construction, make any improvements or take any action, the Contributors shall
cause any such construction, improvements and/or action to be taken, completed
and fully paid for by such Contributor, at its expense, prior to the Closing
Date. No such obligation shall be unfulfilled, and no liability for or payment
in respect of any such obligation shall be unsatisfied as of the Closing Date.
4.10 Financial Statements and Reports. The Contributors shall provide
to the Company financial statements, agings of accounts receivable, and other
financial, operating or statistical information for each Property upon any
reasonable request of the Company, and the general partner or chief financial
officer, as the case may be, of each Contributor shall certify that, to the best
of his or its knowledge, such financial statements and other reports are true,
accurate and complete in all material respects.
V. STATUS OF TITLE TO PROPERTY
5.1 State of Title. At Closing, the Contributors shall own,
beneficially and of record, good and marketable fee simple title to the
Properties, subject only to the mortgages listed on Schedule 9.23 hereto (the
"Mortgages") and those covenants, conditions and restrictions set forth on
Schedule 5.1 hereto (the "Scheduled Exceptions"). The Mortgages and acceptable
Scheduled Exceptions are referred to collectively herein as the "Permitted
Exceptions."
5.2 Preliminary Evidence of Title. Within no more than 30 days after
the date hereof, the Contributors and the Partnership shall obtain, in a form
acceptable to the Partnership, the following documents to evidence the condition
of the title to each of the Properties:
5.2.1 Commitments (the "Title Commitments") to the Partnership for
ALTA Form B (1987) Owner's Title Insurance Policies
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committing to insure, at standard rates, title to each Property
as being good and marketable, subject only to the Permitted
Exceptions, in the amount of the fair market value of each such
Property, issued by a title company acceptable to the Company
and the Partnership (the "Title Insurer"). The Title
Commitments shall be effective as of the Closing Date, and
shall reflect that fee simple title is held by the respective
Contributor. Each Owner's Title Insurance Policy to be issued
to the Partnership at Closing pursuant to Section 7.2.2 below
("Title Insurance Policies") shall contain an extended coverage
endorsement over the general or standard exceptions which are a
part of the printed form of the policy and subject only to the
Permitted Exceptions. Each Title Insurance Policy shall, in
addition, (a) include provisions for co-insurance, in such
amounts of liability acceptable to the Partnership and the
Company; (b) not contain any Survey exception, (c) not contain
any exceptions for (i) liens for labor or material, whether or
not of record, (ii) parties in possession (other than Prior
Occupants under the Leases, solely as such Prior Occupants),
(iii) unrecorded easements, and (iv) taxes and special
assessments not shown on the public records, (d) provide for
the following endorsements: (i) an access endorsement insuring
that there is direct and unencumbered access to the Land from
all adjacent public streets and roads, (ii) a survey
endorsement insuring that all foundations in place as of the
date of such policy are within the lot lines and applicable
setback lines, that the improvements do not encroach on
adjoining land or any easements, and that there are no
encroachments of improvements from adjoining land on any or the
Properties or any part thereof, (iii) an ALTA Form 3.1 zoning
endorsement insuring that the Properties are zoned for the
buildings and the operation thereof as contemplated by the
terms and provisions of this Agreement, (iv) a non-imputation
endorsement, by which the Title Insurer waives any defense
based upon knowledge of any person or entity (other than the
knowledge of the Partnership or its designees), (v) each
Property constitutes a separate lot of record and is separately
assessed for real estate tax purposes, (vi) an endorsement
commonly referred to as a "Fairway endorsement," providing
among other things, that the Title Insurer waives any defense
based on a dissolution or termination of the insured
partnership or the formation of a new partnership solely by
reason of one or more transfers of
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all or any part of the partnership interests of any one or more
of the general partners of the insured to the Company or the
Partnership and/or any one or more of the limited partners of
the insured, and/or the transfer of any one or more of the
limited partner's interests to the current general partner, the
Company or the Partnership, and (vii) such other endorsements
as the Partnership and the Company may reasonably require.
5.2.2 Written results of searches reflecting any liens, judgements,
tax liens, bankruptcies, and open dockets (the "UCC Searches"),
conducted by a company reasonably acceptable to the
Partnership. The UCC Searches shall name each Contributor,
Prior Occupant, and Property, and shall search the appropriate
land records and central filing office for Uniform Commercial
Code financing statements.
5.2.3 Legible copies of all documents of record referred to in any
Title Commitment or disclosed by the UCC Searches, and all
other documents evidencing or, to the extent in the possession
or control of the Contributors, relating to, matters reflected
in any Title Commitment or the UCC Searches.
5.2.4 Current ALTA/ACSM land title surveys of each of the Properties
(the "Surveys") dated on or after the date of this Agreement,
certified to the Partnership and the Title Insurer (and such
other persons or entities as the Partnership may designate) by
a surveyor registered in the State where the Property is
located. Each Survey shall be in form and substance acceptable
to the Partnership and the Title Insurer.
5.3 Title Defects. The Partnership shall have the right to review the
Title Commitments, UCC Searches or Surveys (or any revision or update of any of
them) and to require the Contributor to remove, correct, and cure any defects in
the title or other such matters relating to the title that the Partnership
determines, in its sole discretion, are acceptable and those that are
unacceptable. The Partnership shall notify the Contributors of those matters
listed on Schedule 5.1 that are acceptable, which shall be referred to as the
"Scheduled Exceptions." The Partnership shall notify the Contributors within ten
(10) business days after the Partnership receives the Title Commitments, UCC
Searches or Surveys, as the case may be, of any such defects or matters that the
Partnership finds to be unacceptable, and, prior to the Closing Date, such
Contributors shall, (i) as to any such exception or other matter of a
nonmonetary nature, use reasonable efforts to remove, correct and cure such
defects or such other matters, and (ii) as to any such defect or other matter of
a monetary nature, cause such lien or encumbrance or other matter to be
discharged and released,
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in each case to the reasonable satisfaction of the Partnership; except that such
Contributor shall not be required to expend more than $50,000 with respect
thereto. If such Contributor fails to remove, correct and cure such defects or
such other matters, the Partnership may, at its option and as its exclusive
remedy, (x) terminate this Agreement, in which event this Agreement, without
further action of the parties, shall become null and void and neither party
shall have any further rights or obligations under this Agreement, (y) terminate
this Agreement with respect to such Property and reduce the number of Units to
be issued by the Contributors to the Contribution Value of such Property, or (z)
elect to accept title to such Property and discharge or release any liens,
encumbrances or other matters of a monetary nature or which may otherwise be
discharged, released or removed by the payment of a monetary sum and deduct from
the number of Initial Units issuable to the Contributors the number of Units
that is equal to the lesser of (a) the quotient of such aggregate monetary sums
paid by the Partnership for the correction, removal and cure of such defects and
other matters (plus expenses in connection therewith) divided by the Market
Price, or (b) $50,000. If the Partnership fails to make any such election, the
Partnership shall be deemed to have elected the option contained in clause (y).
VI. CLOSING PRORATIONS AND ADJUSTMENTS
6.1 Prorations and Adjustments. All prorations and adjustments (the
"Prorations") with respect to the Property or Properties, for the period up to
and through the Closing Date, shall be the responsibility of or belong to the
Contributors and all such Prorations for the period after the Closing Date shall
be the responsibility of or belong to the tenant under the applicable Company
Lease. The Company and the Partnership shall have no responsibility for, and
will receive no benefit from, the Prorations, and the Contributor shall have
liability for such Prorations. Such Prorations shall include, but not be limited
to, the following:
6.1.1 real estate and personal property taxes and assessments;
6.1.2 common area maintenance fees and reimbursements for prior years
property taxes payable by Prior Occupants;
6.1.3 the rent payable by Prior Occupants under leases in effect
immediately prior to the Closing Date (the "Leases") as set
forth on Schedule 9.19.2 hereto;
6.1.4 the full amount of security deposits paid under the Leases,
together with interest thereon if required by law or otherwise;
6.1.5 water, electric, telephone and all other utility and fuel
charges and those that are meter read will be read by the
appropriate utility and service transferred as of the Closing
Date;
6.1.6 amounts due and prepayments under the Service Contracts;
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6.1.7 assignable license and permit fees;
6.1.8 other expenses of operation and similar items; and
6.1.9 all or any other disbursements, payments, and obligations
relating to the Property, except for payments under any
Mortgages transferred to the Partnership at the Closing, the
payments for which shall be obligations of the Partnership as
of, but not before, the Closing Date.
6.1.10 Notwithstanding the foregoing, any refunds of real or personal
property taxes for tax years beginning prior to the Closing
Date shall belong to Contributors, and if paid to the
Partnership shall be promptly refunded by the Partnership to
Contributors in cash.
VII. CLOSING
7.1 Closing Date. The closing of the transactions contemplated by this
Agreement (the "Closing") shall occur at the offices of Xxxxxx, Xxxxxx &
Xxxxxxxxx, 0000 X Xxxxxx, X.X. Xxxxxxxxxx, X.X. 00000-0000, at 10:00 a.m. on
January 31, 1998, or such other time or place as shall follow the closing of the
initial public offering of Initial Shares of the Company pursuant to the
Registration Statement, provided that all conditions to Closing have been
satisfied or waived, or at such other time and place as the Contributors and the
Company shall agree in writing, provided, however, that under no circumstances
shall the Closing occur later than March 31, 1998. The "Closing Date" shall be
the date of the Closing.
7.2 Closing Documents
7.2.1 Contributors. Not later than five (5) business days prior to
the Closing Date, the Contributors shall deliver to the Company
and the Partnership the following:
a. deeds and assignments for the Properties;
b. if not previously delivered pursuant to a waiver by the
Company, executed copies of all Company Leases, effective
at Closing;
c. any affidavits, certificates and other documents (including
without limitation non-imputation affidavits and/or
certificates) that are reasonably
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necessary for the Title Insurer to issue the Owner's Title
Insurance Policies in the form and condition required by
this Agreement;
d. evidence satisfactory to the Partnership that all mortgages
and other indebtedness secured by the Properties that are
not being specifically assumed by the Partnership have been
paid in full;
e. for each Contributor that is a corporation, a corporate
resolution authorizing the transactions contemplated by
this Agreement, a certificate of good standing, a certified
copy of the articles of incorporation and bylaws, and a
certificate of incumbency certifying the titles and
signatures of the corporate officers authorized to
consummate the transactions contemplated hereunder on
behalf of Contributor and such other evidence of
Contributor's power and authority as the Company reasonably
requests;
f. for each Contributor that is a partnership or a limited
liability company, a resolution authorizing the
Contribution in exchange for the Units the execution of
closing documents and the transactions contemplated by this
Agreement, a certificate of good standing, a certified copy
of the partnership or operating agreement governing such
Contributor, and a certificate of incumbency certifying the
titles and signatures of the general partners or members
authorized to consummate the transactions contemplated
hereunder on behalf of Contributor and such other evidence
of power and authority of the Contributor as the
Partnership reasonably requests;
g. for each Contributor, an affidavit stating, under penalty
of perjury, its U.S. taxpayer identification number and
that it is not a foreign person within the meaning of
Section 1445 of the Internal Revenue Code of 1986, as
amended (the "Code");
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h. a counterpart of the Partnership Agreement executed by each
Contributor;
i. investor questionnaires ("Investor Questionnaires") in the
form attached to this Agreement as Exhibit 7.2.1(i)
executed by each Contributor;
j. letters advising Prior Occupants of the change in ownership
of the Properties and directing Prior Occupants to pay Rent
to the Partnership or as the Partnership may direct;
k. an updated Rent Roll (as defined in Section 9.19.2) as of
the Closing Date (including a listing of all delinquent and
prepaid rents);
l. agreements from each Prior Occupant who leases any Property
terminating its Leases with Contributors;
m. all of the original Leases, written Service Contracts and
Management Contracts and any and all building plans,
surveys, site plans, engineering plans and studies, utility
plans, landscaping plans, development plans, specifications
drawings, marketing artwork, construction drawings, soil
tests, complete warranty book including all contractors and
subcontractors and other documentation concerning all or
any part of each Property to the extent that any of the
foregoing documents are in the possession or control of
Contributors;
n. any bonds, warranties or guaranties which are in any way
applicable to any Property or any part thereof to the
extent any of the foregoing are in the possession or
control of Contributors;
o. If the Company shall so request, the Contributor shall
deliver to the Company a letter (an "Estoppel Letter") in a
form acceptable to the Company, dated not more than thirty
(30) days prior to the Closing Date, from each tenant under
each Lease. The Estoppel Letter shall be fully completed in
a manner
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reasonably satisfactory to the Company, and with no
modifications other than those reasonably acceptable to the
Company. In the event Estoppel Letters in form and content
reasonably satisfactory to the Company are not received by
the Company and the Partnership within the time prescribed
herein, then the Partnership and the Company, at their
option and as a non-exclusive remedy, upon notice to the
Contributors, may immediately terminate this Agreement, or
may terminate this Agreement with respect to the relevant
Property, in which case the number of Initial Units
issuable hereunder as set forth on Schedule 1.3(a) shall be
reduced by the Contribution Value of such Property.
p. a certificate in the form attached hereto as Exhibit
7.2.1(p) (a "Lender's Estoppel Certificate") from each
mortgagee of each Contributor and each Property and from
any other person or entity that has, or may have as a
result of the transactions contemplated hereby, a security
interest in any of the Properties. In the event that the
Lender's Estoppel Certificates in form and content
reasonably satisfactory to the Company are not received by
the Company and the Partnership within the time period
prescribed herein, then the Partnership and the Company, at
their option and as a non-exclusive remedy, may terminate
this Agreement upon notice to the Contributor, or may
terminate this Agreement with respect to the relevant
Property, in which case the number of Initial Units
issuable hereunder as set forth on Schedule 1.3(a) shall be
reduced by the Contribution Value of such Property.
q. an opinion of Contributor's counsel substantially in the
form attached hereto as Exhibit 7.2.1(q); and
r. all other documents reasonably required by the Company in
connection with the transactions contemplated by this
Agreement.
7.2.2 Partnership. At the Closing, the Partnership shall deliver the
following:
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a. Initial Units, as required by Sections 1 and 2 of this
Agreement;
b. an executed counterpart of the Partnership Agreement
executed by the Company, as the General Partner of the
Partnership;
c. for the Company, a resolution of its Board of Trustees
authorizing the transactions contemplated hereby and a
certificate of good standing from the State Department of
Assessments and Taxation of the State of Maryland;
d. for the Partnership, evidence of the Partnership's
authorization of the transactions contemplated hereby and a
certified copy of the Partnership Agreement and a
Certificate of Limited Partnership certified by the
Secretary of State of Delaware; and
e. an opinion of Xxxxxx, Xxxxxx & Xxxxxxxxx, substantially in
the form attached hereto as Exhibit 7.2.2(f).
7.3 Conditions to the Partnership's Obligation to Close. At the option
of the Partnership, the obligations of the Company and the Partnership under
this Agreement are subject to the satisfaction of the following conditions
(unless explicitly waived in writing):
7.3.1 Each Contributor shall have terminated such existing Management
Contracts with any Prior Occupant as have been specified in
writing by the Company or the Partnership prior to the Closing
Date.
7.3.2 Each Contributor shall have terminated all Leases prior to the
Closing Date.
7.3.3 Each Contributor shall have terminated such existing Service
Contracts as have been specified in writing by the Company or
the Partnership prior to the Closing Date.
7.3.4 Each and every representation and warranty of the Contributors
contained in this Agreement is true, correct and
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complete in all material respects as of the date hereof and at
all times through the Closing Date.
7.3.5 All Prior Occupants shall be paying rental on all Properties as
set forth in the Estoppel Letter approved by the Company and
sent to each such Prior Occupant.
7.3.6 The Contributors shall have fully performed and satisfied each
and every material obligation, term and condition to be
performed and satisfied by them under this Agreement.
7.3.7 All consents, authorizations, certificates, Estoppel Letters,
Lender's Estoppel Certificates and approvals required to be
obtained by the Contributors in connection with the Agreement
shall have been obtained, including but not limited to all
consents, approvals and authorizations (without any conditions
or requirements) required to be obtained under any Mortgage,
deed of trust or other instrument relating to any of the
Properties or pursuant to which any of the Contributors are
bound in order to complete the transactions contemplated under
this Agreement.
7.3.8 The Company shall simultaneously with the Closing close the
initial public offering of the Initial Shares.
7.3.9 The Contributors shall have paid in full such Mortgages and
other indebtedness secured by the Properties as required by the
Company and Partnership and shall have provided the Company and
Partnership with satisfactory evidence thereof, and to the
extent that such Mortgages are to be paid off following
Closing, the mortgagee shall deliver pay-off letters to the
Company and the Partnership.
7.3.10 The condition of the Property shall not have materially
changed.
7.3.11 The Partnership shall have received an Owner's Title Insurance
Policy (or marked-up commitment therefor) for each Property
insuring fee simple title to such Property in the amount of the
fair market value of such Property subject only to Permitted
Exceptions, and otherwise in the form and condition required by
this Agreement;
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7.3.12 If the Contributors do not deliver completed Disclosure
Schedules to the Company and Partnership at the time of the
execution of this Agreement, the Contributors shall deliver to
the Company and Partnership all substantially completed
Disclosure Schedules required by this Agreement within fifteen
(15) business days after the date of the execution of this
Agreement.
7.3.13 The Contributor and each Designee shall complete and deliver to
the Company and the Partnership Investor Questionnaires
evidencing such Contributor's or Designee's qualification as an
"accredited investor" under the Securities Act of 1933, as
amended.
7.4 Conditions to the Contributor's Obligation to Close. The
obligations of the Contributor under this Agreement are subject to the
satisfaction of the following conditions (unless explicitly waived in writing):
7.4.1 Each of the representations and warranties of the Partnership
contained in this Agreement is true, correct and complete as of
the date hereof and at all times through the Closing Date.
7.4.2 The Partnership and the Company shall have fully performed and
satisfied each and every obligation, term and condition to be
performed and satisfied by them under this Agreement.
7.4.3 The Company shall have completed its initial public offering
pursuant to the Registration Statement.
7.4.4 All consents, authorizations and approvals required to have
been obtained by the Company and the Partnership in connection
with this Agreement shall have been obtained.
7.5 Transaction Costs.
7.5.1 The Contributors will pay or bear all costs (including any
recordation and transfer taxes, title insurance, fees and
expenses of going to record) in connection with the transfer by
the Contributors of the Properties (collectively referred to as
the "Closing Costs"). The Company and the Partnership shall
bear the cost of their due diligence activities.
Notwithstanding anything herein to the contrary, at the option
of the Contributor in lieu of paying the Closing Costs or
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Consent Fees (as defined hereafter), the Contributor may elect
to deduct from the Contribution Value of the Property, all or
part of such Closing Costs or Consent Fees, by advising the
Company to reduce the number of Units deliverable pursuant to
Schedule 1.3(a) by a number equal to the quotient determined by
dividing (i) the amount of the Closing Costs or Consent Fees to
the extent not paid by Contributor, by (ii) the Market Price.
7.5.2 The Contributors will pay or bear all assumption fees,
prepayment penalties, premiums, lender's consent fees or other
such charges ("Consent Fees") imposed in connection with the
transactions contemplated hereby, and all Consent Fees imposed
by all other lenders in connection with the transactions
contemplated hereby.
7.5.3 Except as specified above and elsewhere in this Agreement, each
party shall bear and pay its expenses in connection with this
Agreement and the transactions contemplated herein, including
the fees of their respective professional advisors.
VIII. CASUALTY LOSS AND CONDEMNATION
8.1 Casualty. Prior to Closing, all risk of loss shall be on each
Contributor. If, prior to Closing, the Properties or any part thereof shall be
destroyed or materially damaged by fire or other casualty, the Partnership may,
at its option, either (i) require the appropriate Contributors to repair such
damage prior to Closing to the reasonable satisfaction of the Partnership, at no
cost or expense to the Company or the Partnership, in which event the proceeds
of any insurance applicable thereto shall be paid to the Contributor, or (ii)
itself settle the loss under all policies of insurance applicable to the
destruction or damage and receive the proceeds of insurance applicable thereto,
and the Contributor shall, at Closing and thereafter, execute and deliver to the
Partnership all required proofs of loss, assignments of claims and other similar
items. Notwithstanding anything herein to the contrary, in the event such loss
or casualty shall constitute a total or substantial loss or casualty or, in the
opinion of the Company, in its sole discretion, shall render the Property
unsuitable for its intended purpose for a period of ninety (90) days or longer,
then the Company and the Partnership, at their option, may terminate this
Agreement with respect to such Property upon notice to the Contributor, and the
number of Units issuable as set forth in Schedule 1.3(a) with respect to such
Property shall be reduced by the Contribution Value of such Property.
8.2 Condemnation or Taking. If, prior to Closing, any Property or any
part thereof shall be condemned or taken and such condemnation or taking
materially interferes with the existing business use of the Property, the
Company and the Partnership may (i) terminate this
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Agreement either as to all the Properties or solely as to such Property, in the
discretion of the Partnership and the Company, or (ii) complete the transactions
contemplated by this Agreement notwithstanding such condemnation. If the Company
and the Partnership elect to complete the transactions contemplated hereby, the
Partnership shall be entitled to receive the condemnation proceeds and the
appropriate Contributor shall, at Closing and thereafter, execute and deliver to
the Partnership and the Company all required assignments of claims and other
similar items. If the Partnership and the Company elect to terminate this
Agreement, then upon written notice to the Contributors and without further
action of the parties, this Agreement shall become null and void and no party
shall have any rights or obligations under this Agreement. If the Partnership
and the Company elect to terminate this Agreement solely with respect to the
affected Property, the number of Initial Units issuable as set forth in Schedule
1.3(a) with respect to such Property shall be reduced by the Contribution Value
of such Property.
IX. REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTORS
The Contributors, jointly and severally, represent and warrant to the
Company and the Partnership that, except as described on the Disclosure
Schedules attached hereto and incorporated by reference herein, the following
are true, complete and correct as of the date of this Agreement and as of the
Closing Date.
9.1 Organization. Each Contributor is duly organized and validly
existing and in good standing under the laws of the state of its organization,
and has all requisite power and authority to own or lease and operate its
properties (including the Properties) and assets and conduct its business in the
manner in which they are being owned or leased and operated and conducted, as
the case may be. Each Contributor is duly qualified and authorized and is in
good standing in all jurisdictions where its ownership, lease or operation of
assets and properties (including the Properties) or the conduct of its business
requires such qualification or authorization.
9.2 Authority. The execution and delivery of this Agreement and all
agreements, documents and instruments contemplated hereby and the performance of
all transactions contemplated herein or therein, have been duly and validly
authorized by all requisite partnership, corporate or trust action, as the case
may be, and by the general partners, board of directors, stockholders, or
trustees of each Contributor, as the case may be. This Agreement and the
agreements, documents and instruments executed and delivered in connection
herewith constitute the legal, valid and binding obligations of the
Contributors, enforceable in accordance with their respective terms. To the
knowledge of the Contributors, no consent, authorization, approval or waiver by
any governmental agency or authority or by any third party is required in
connection with the execution and delivery of, and the performance of the
obligations to be performed under, this Agreement and the documents and
instruments executed and delivered in connection herewith, or if any of the
foregoing is required, it has been obtained.
9.3 Interest in Contributed Properties. Each Contributor is the record
and beneficial owner of, and has good and marketable title to, the interests in
the Properties set forth
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opposite such Contributor's name on Schedule 1.2, free and clear of all liens,
options, adverse claims or encumbrances, and such interest is not the subject of
any agreement (other than this Agreement) providing for the sale, assignment or
transfer thereof. Such Contributor has the full power, capacity and authority to
sell, transfer and assign the legal and equitable ownership of his/her or its
interest to the Partnership as provided in this Agreement, Schedule 1.2 is true,
complete and accurate in all respects as to each such Contributor, and the
Contributors have not entered into any agreement and have no knowledge of any
agreement or understanding to issue any additional interests in any Contributor
to any other person or entity.
9.4 Investment. Each Contributor hereby represents and warrants that:
9.4.1 Such Contributor or its Designee is acquiring the Units issued
to him hereunder for investment for his own account and not as
an agent or nominee for any other person or entity.
9.4.2 Such Contributor or its Designee will not, directly or
indirectly, offer, transfer, sell, assign, pledge, hypothecate
or otherwise dispose of such Units (each such action, a
"Transfer") unless (a) such Transfer complies with the
provisions of the Partnership Agreement, if applicable, and
this Agreement, (b) either (i) the Transfer is pursuant to an
effective registration statement under the Act, or (ii) such
Contributor or its Designee shall have furnished the Company or
the Partnership, as the case may be, with an opinion of counsel
which opinion of counsel shall be reasonably satisfactory to
the Partnership or the Company, as the case may be, to the
effect that no such registration is required because of the
availability of an exemption from registration under the Act,
and (iii) such Transfer shall be in compliance with any
applicable state or foreign securities and "blue sky" laws.
9.4.3 Such Contributor or its Designee has been advised by the
Partnership that: (i) neither the offer nor sale of the Units
have been registered under the Act or any state or foreign
securities and "blue sky" laws; (ii) the Units are
characterized as a "restricted security" under the Act inasmuch
as they are being acquired from the Partnership or the Company,
as the case may be, in a transaction not involving a public
offering; (iii) the Units must be held indefinitely and such
Contributor or its Designee must continue to bear the economic
risk of the investment in the Units, unless the offer and sale
of such Units are subsequently registered under the Act or an
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exemption from such registration is available and all
applicable state or foreign securities and "blue sky" laws are
complied with; (iv) it is not anticipated that there will be
any public market for the Units in the foreseeable future; (v)
Rule 144 promulgated under the Act is not presently available
with respect to offers or sales of the securities of the
Company or the Partnership and neither the Company nor the
Partnership has covenanted to make such Rule available nor has
it made any covenants with respect to other rules by which
offers or sales may be made; (vi) when and if the Units may be
disposed of without registration under the Act in reliance on
Rule 144, such disposition can be made only in limited amounts
in accordance with the terms and conditions of such Rule; and
(vii) if the Rule 144 exemption is not available, public offer
or sale of the Units without registration will require the
availability of another exemption under the Act.
9.4.4 Such Contributor or its Designee is (a) an "accredited
investor" as defined in the Act and (b) has such knowledge,
skill and experience in business, financial and investment
matters so that it is capable of evaluating the merits, risks
and consequences of an investment in the Units and is able to
bear the economic risk of loss of this investment.
9.4.5 Such Contributor or its Designee has been afforded (a) the
opportunity to ask such questions as he/she or it has deemed
necessary of, and to receive answers from, representatives of
the Partnership or the Company, as the case may be, concerning
an investment in the Units and the merit and risks of investing
in the Units and (b) access to information about the
Partnership's and the Company's financial condition, business,
results of operations and prospects sufficient to enable him to
evaluate his investment in the Units.
9.4.6 Such Contributor or its Designee has relied solely on its own
legal counsel with respect to the federal and state tax
consequences of an investment in the Units and all related
transactions.
9.5 Title to the Properties. The Contributor is the sole owner
beneficially and of record of good, marketable and insurable fee simple title to
the Properties as set forth on Schedule 1.2 free and clear of all liens, claims
or encumbrances except the Permitted Exceptions, and Schedule 1.2 is true,
accurate and complete in all material respects. Between the date hereof and
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the Closing Date, no liens, claims or encumbrances will be created or permitted
to be created on any Property other than the Permitted Exceptions. Prior to or
at the Closing all monetary encumbrances on any Property, other than the
Permitted Exceptions, shall be duly canceled, removed and discharged of record,
and proof thereof satisfactory to the Title Insurer, the Company and the
Partnership shall be delivered to the Company and the Partnership. Except for
Prior Occupants, there are no parties in possession of any part of the
Properties as of the Closing Date, and there are no other rights of possession,
or agreements providing for the sale, assignment or transfer of title to any
Property or portion thereof (other than this Agreement), which have been granted
to any third parties.
9.6 No Defaults. (a) The Contributor is not in default of any of its
material obligations under any agreement, franchise, license, contract, deed,
Mortgage, lease, instrument, certificate, affidavit or covenant affecting title
to the Properties; (b) there are no contracts or agreements, such as
maintenance, service, or utility contracts affecting the Properties other than
the Service Contracts, and no party to such contracts is in material default or
breach under the terms and conditions thereof; and (c) except for the Permitted
Exceptions and the Service Contracts, there are no contracts, agreements,
liabilities, claims or obligations of any kind or nature relating to the
Properties and to which the Contributors will be bound or the Properties will be
subject after the Closing except as expressly described in Schedule 9.6 attached
hereto.
9.7 No Litigation; No Condemnation. There are no actions, suits,
proceedings or claims pending, or to the knowledge of the Contributor,
threatened or contemplated, with respect to or in any manner affecting the
Properties, or the Contributor's interest therein; or the ability of the
Contributors to complete the transactions contemplated by this Agreement or
which could prevent the Contributor from satisfying its obligations under this
Agreement. None of the Contributors have received notice of any pending or
threatened condemnation or similar proceedings or special assessments affecting
the Properties, or any part thereof.
9.8 No Violation. The execution and delivery of this Agreement and the
agreements, documents and instruments executed and delivered in connection
herewith, the consummation of the transactions contemplated hereby or thereby,
and the operation of any Property shall not: (a) conflict with, or result in a
breach of, the terms, conditions or provisions of, or constitute a default
under, any agreement, contract, Mortgage, deed, lease, license, franchise or
instrument to which each Contributor is a party or is subject or to which any
Property is subject; (b) to Contributor's knowledge, violate any agreement,
contract, Mortgage, deed, lease, license, franchise, restriction, easement,
restrictive covenant, or instrument to which any Contributor or any Property is
subject; (c) to Contributor's knowledge, constitute a violation of any
applicable code, resolution, law, statute, regulation, ordinance, rule,
judgment, decree or order; (d) with respect to each Contributor, violate any
provision of its charter, bylaws or other organizational document; (e) except as
to any indebtedness in respect of which the consent of the lender shall have
been obtained prior to the Closing Date, result in the acceleration of any
indebtedness or any encumbrance pertaining to any Contributor or any Property,
or the cancellation of any contract, agreement, franchise, license, instrument
or lease pertaining to any Property (other than as specifically requested
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by the Company or the Partnership pursuant to this Agreement); or (f) except as
to any Permitted Encumbrances, result in the creation of any lien, encumbrance
or security interest upon any Property. None of the Contributors have received
any written notice of any violation (both as to condition of the Property and
use) of any applicable laws, statutes, ordinances, codes (including, but not
limited to, zoning, building, subdivision, pollution, environmental protection,
water disposal, health, fire and safety engineering codes, and laws and
regulations with respect to the submetering of any utilities serving any
Property), and the rules and regulations of, by governmental authority having
jurisdiction over the Properties.
9.9 Required Obligations. The Contributor has paid and performed all
material obligations relating to the Properties required to have been paid or
performed prior to the date hereof and prior to the Closing Date, including but
not limited to all principal installments, interest payments, taxes, penalties
and other charges in connection with all indebtedness relating to or secured by
any of the Properties or an interest in any of the Properties.
9.10 Condition of Properties. Except as disclosed on the Schedule
9.10, the Contributor has not been notified that the structural, mechanical,
electrical, plumbing, roofing and other major systems on any Property and items
of equipment and components located thereon, require to be replaced or are in
need of material repair.
9.11 Warranties. The Contributor has not released or modified any
warranties of builders, contractors, manufacturers or other tradespersons that
have been given to the Contributor without the consent of the Company or the
Partnership.
9.12 Utilities. Usable sanitary and storm sewers and public water, and
electrical utilities (collectively, the "Utilities") of adequate capacity
required for the operation of the Properties, are installed in, and are duly
connected to, the Properties and can be used without any charge except the
normal user charges for sanitary sewers and the normal and usual charges imposed
for public water, gas and electric utilities.
9.13 Zoning. Each Property is currently located in the areas zoned for
its current use, as indicated on the Schedule 9.13 hereto, which classification
permits the development, use and operation of the improvements on such Property
as such improvements currently are being used without special exception or
permit. The Contributor has no knowledge of any threat of, and has not received
written notice of, any proceeding to change adversely or down-zone the existing
zoning classification as to any portion of any Property.
9.14 Improvements. To Contributor's knowledge, all improvements on the
Properties have been constructed in accordance with, and substantially comply
with, all requirements of all applicable laws, ordinances, regulations and
orders, including without limitation applicable zoning, building and fire safety
codes and all restrictive covenants, if any, and other easements, encumbrances
or agreements affecting title to any Properties or improvements. For purposes of
this Section 9.14, "substantially" means that Contributor shall not be permitted
to engage in even de
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minimis non-compliance with applicable laws, ordinance, regulations and orders
if such de minimis non-compliance could result in any governmental,
administrative or other authority executing any penalty, fine, remedy or other
disciplinary action against the Contributor or Contributor's Business.
9.15 Environmental Matters.
9.15.1 For purposes of this Agreement:
a. "Environmental Claim" means any claim, action, cause of
action, investigation, or notice (written or oral) by any
person or entity alleging potential liability (including,
without limitation, potential liability for investigatory
costs, cleanup costs, governmental response costs, natural
resource damages, property damages, personal injuries, or
civil or criminal penalties) arising out of or resulting
from (i) the actual or alleged presence or release into the
environment of any Substance of Concern at any location,
whether or not owned or operated by the Contributor, or
(ii) circumstances forming the basis of any actual or
alleged violation of any Environmental Law.
b. "Environmental Laws" means all federal, state, local, and
foreign laws and regulations relating to pollution or
protection of human health or the environment (including,
without limitation, ambient air, surface water, ground
water, wetlands, land surface, subsurface strata, and
indoor and outdoor workplace), including, without
limitation, (i) laws and regulations relating to emissions,
discharges, releases, or threatened releases of Substances
of Concern, and (ii) common law principles of tort
liability.
c. "Substances of Concern" means chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous
substances, radioactive materials or genetically modified
organisms, which are, have been or become regulated by any
federal, state or local government authority including,
without limitation, (i) petroleum or any fraction thereof,
(ii) asbestos, (iii) any substance or material defined as
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a "hazardous substance" pursuant to (S) 101 of the
Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. (S) 9601), or (iv) any substance
or material defined as a "hazardous chemical" pursuant to
the federal Hazard Communication Standard (29 C.F.R. (S)
1910.1200).
9.15.2 To the Contributor's knowledge, the Contributor and Property
are in full compliance with all applicable Environmental Laws,
which compliance includes, but is not limited to, possession by
the Contributor of all permits and other governmental
authorizations required under applicable Environmental Laws,
and compliance with the terms and conditions thereof. The
Contributor has not received any communication (written or
oral), whether from a governmental authority, citizens group,
employee or otherwise, that alleges that the Contributor or
Property is not in full compliance with the Environmental Laws,
and, to the Contributor's best knowledge after due inquiry,
there are no circumstances that may prevent or interfere with
such full compliance in the future.
9.15.3 There is no Environmental Claim pending or threatened against
the Contributor or, to the Contributor's best knowledge after
due inquiry, against any person or entity whose liability for
any Environmental Claim the Contributor has retained or assumed
either contractually or by operation of law.
9.15.4 To the Contributor's knowledge, there are no past or present
actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the release,
emission, discharge, presence, or disposal of any Substance of
Concern, at or relating to any of the Properties that could
form the basis of any Environmental Claim against the
Contributor or, to the Contributors' best knowledge after due
inquiry, against any person or entity whose liability for any
Environmental Claim the Contributor has retained or assumed
either contractually or by operation of law.
9.15.5 Without in any way limiting the generality of the foregoing, to
the best of Contributor's knowledge, (a) all on-site and off-
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site locations where the Contributor has treated, disposed, or
arranged for the disposal of Substances of Concern or stored
hazardous wastes (as defined under the Resource Conservation
and Recovery Act or analogous state laws) are identified in
Schedule 9.15.5(a); (b) all underground and aboveground storage
tanks, whether or not currently in use, and the capacity and
contents of such tanks, located on any of the Properties are
identified in Schedule 9.15.5(b), and except as set forth in
Schedule 9.15.5(b) no underground or above ground storage tank
that has been removed from any Property, or that is currently
located at any Property, has leaked or is leaking; (c) except
as set forth on Schedule 9.15.5(c), there is no asbestos
contained in or forming part of any building, building
component, structure or office space on any Property; (d) no
polychlorinated biphenyls (PCBs) are used or stored on any
Property; (e) the Contributor has previously provided to the
Company copies of all environmental audit reports, Phase I and
Phase II investigation reports, technical reports regarding
environmental sampling results, and similar environmental
reports in the possession of the Contributor or its contractors
or agents relating to any Property; and (f) all permits and
other governmental authorizations currently held by the
Contributor for any Property pursuant to the Environmental Laws
are identified in Schedule 9.15.5(f).
9.16 Insurance. Schedule 9.16 contains a complete and correct
description of all policies of insurance presently maintained by the Contributor
with respect to all Properties and the operations thereof. To the knowledge of
the Contributor, the Contributor and the Properties are in compliance with the
requirements of each such policy, there is no violation of any of the provisions
of the insurance policies, and all of such insurance policies are in full force
and effect. The Contributor has not received from any insurance company which
carries underwriters insurance on any Property, or any Board of Fire
Underwriters, any notice of any defect or inadequacy in connection with any
Property or its operation which, since the date of such notice, has not been
corrected.
9.17 Management. Except as disclosed on the Disclosure Schedules, on
the Closing Date, there are and will be no contract or agreement in effect
between the Contributor and any third party for the management or leasing of any
Property, except for those Management Contracts that the Partnership does not
require to be terminated, and there shall be no leasing commissions due and
owing, or to become due and owing, in connection with any of the Leases.
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9.18 Compliance. To the Contributor's knowledge, the Contributor has
complied in all material respects with all laws, ordinances, rules, regulations
and orders of all governmental authorities applicable to the ownership,
management, operation, construction, maintenance and repair of any Property.
9.19 Leases; Rent Rolls. Except as set forth on Schedule 9.19:
9.19.1 Copies of all Leases for each of the Properties and all parts
thereof, as amended through the date hereof have been made
available to the Company and the Partnership; such copies are
and shall be, in all material respects, true, accurate and
complete records of all agreements and understandings with
respect to the use or lease of all or any portion of any of the
Properties or otherwise constituting Leases that are currently
outstanding (as referenced on the Rent Roll) including all
amendments and modifications thereto.
9.19.2 Schedule 9.19.2 (the "Leases and Rent Roll") is a true,
complete and correct list of all current Leases for the
Properties or any part thereof.
9.19.3 Each of the Leases is in full force and effect, constitutes the
legal, valid and binding obligation of the Prior Occupant
thereunder, enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy and similar
laws affecting the enforcement of creditors' rights generally
or equitable considerations which may affect a court's exercise
of its equitable powers, and has not been modified, amended or
extended.
9.19.4 To the knowledge of the Contributor, none of the Prior
Occupants is in default in the performance or observance of any
of the terms, covenants or conditions to be kept, observed or
performed by it under its Lease and no event has occurred
which, with the lapse of time or the giving of notice or both,
would constitute a default thereunder.
9.19.5 No Prior Occupant has an option or right of refusal to purchase
any Property or any part thereof.
9.19.6 Except as specified in the Estoppel Letter approved by the
Company and sent to a Prior Occupant, no Prior Occupant is
entitled to any rebate, concession, deduction or offset.
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9.19.7 Except as specified in the Estoppel Letter approved by the
Company and sent to a Prior Occupant, no Prior Occupant has
paid any rent, additional rent or other charge of any nature
for a period of more than thirty (30) days in advance.
9.19.8 Except as specified in the Estoppel Letter approved by the
Company and sent to a Prior Occupant, all Prior Occupants are
paying full rental under all Leases.
9.19.9 No Prior Occupant has any claim or basis for any claim for
reduction, deduction or set-off against the landlord or the
rent under such Lease.
9.19.10 No Prior Occupant has given the Contributors, or the landlords
(if different than the Contributors) named in the Leases, oral
or written notice of any intent to terminate its Lease, no
Prior Occupant has refused to execute and deliver the
Occupancy Lease at Closing, or no Prior Occupant has refused
to vacate its premises or such Property, or otherwise to cease
occupancy of its premises or such Property.
9.19.11 The Contributor is the landlord under the Leases.
9.19.12 The Contributor has performed all obligations, including
repairs, if any, required to be performed by them, and are not
in default under any of the Leases.
9.20 Service Contracts; Management Contracts. Schedule 9.20(a) is a
list of all employment, union, purchase, service and maintenance agreements,
leasing agreements, listing agreements, equipment leases and any other
agreements, contracts, licenses and permits affecting or pertaining to the
Properties or any part thereof (the "Service Contracts"), and Schedule 9.20(b)
is a list of all management contracts relating to the Properties (the
"Management Contracts"). The Contributor is not party to any licenses or leases
of personal property or any other contracts or agreements, written or oral, of
any kind or character, relating to the management, operation, maintenance or
repair of any Property, or otherwise, except for the Leases and the Service
Contracts. The Contributor has performed all obligations required to be
performed by them and are not in default under any of the Service Contracts.
Each of the Service Contracts is in full force and effect and constitutes the
legal, valid and binding obligation of the respective parties thereto,
enforceable in accordance with its terms, and has not been modified, amended or
extended.
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9.21 Permits. All permits, licenses, inspections and other approvals
from all applicable governmental authorities having jurisdiction over the
Contributor and the Properties that are necessary in connection with the
operation of the use, ownership and operation of the Properties as they are
currently used, have been obtained and are in full force and effect.
9.22 Financial Statements. The Contributor has delivered to the
Partnership and the Company the Financial Statements (as defined in Section
12.2.1) and the related statements of income, changes in equity, and cash flow
and all schedules and the notes thereto. The Financial Statements: (a) present
fairly the financial condition and the results of operations, changes in equity,
and cash flow of each Property, as at the respective dates of and for the
periods referred to in such Financial Statements, all in accordance with
generally accepted accounting principles and standards; (b) reflect the
consistent application of such accounting principles throughout the periods
involved and for each and all Properties; and (c) are true, complete and
correct. Since the latest date of the Financial Statements, there have been no
changes in any of the accounting policies, practices or procedures of the
Contributor.
9.23 Undisclosed Liabilities. Schedule 9.23 hereto is a true, complete
and accurate description of all debts, liabilities and obligations of the
Contributor relating to each of the Properties. There are no debts, liabilities
or obligations (whether known or unknown, disputed or undisputed, fixed,
contingent or otherwise) associated with or relating to any of the Properties,
or secured by any of the Properties, other than those specified and described on
Schedule 9.23 hereto.
9.24 Contracts. Attached hereto as Schedule 9.24 is a complete and
accurate list of all contracts, agreements or understandings (whether or not in
writing), other than the Leases, Service Contracts and Management Contracts,
relating to any of the Properties, to which the Contributor is a party or by
which it or any of the Properties is bound.
9.25 Tax Matters. The Contributors or their Designees have relied
solely on their own counsel for advice on any and all tax matters relating to
this Agreement and have not relied on any advice or representations of the
Company, the Partnership, or their counsel with respect to any tax matters
relating to this Agreement.
9.26 Employee Benefit Liabilities. Except as listed on Schedule 9.26,
neither the Contributor nor any entity or Affiliate currently or previously
within a controlled group or under common control with the Contributor within
the meaning of Section 414(b) or (c) of the Code or Section 4001 of the Employee
Retirement Income Security Act of 1974 ("ERISA"), as amended ("Controlled Group
Member"), currently sponsors or has previously sponsored, contributed to, or
been obligated to contribute to, any defined benefit pension plan subject to
Title IV of ERISA or any plan subject to the funding rules of Section 412 of the
Code or Section 302 of ERISA ("Pension Plans"). All Pension Plans are fully
funded on a termination basis (using Pension Benefit Guaranty Corporation
assumptions), and each Contributor and Controlled Group Member has timely made
all funding contributions required by Section 302 or Title IV of ERISA or
Section 412 of the Code. No Contributor or Controlled Group Member has any
actual or contingent liability with
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respect to any terminated Pension Plan. Neither the Property nor any other
assets of the Contributor are subject to liens under the Code or ERISA with
respect to any employee benefit plan.
9.27 [Intentionally Omitted]
9.28 Taxes. The Contributor has filed all federal, state and local tax
returns required to be filed by the Contributor. With respect to any periods
prior to the Closing Date, the Contributor (i) has no knowledge of any unpaid
taxes that would create a lien on any Property, and (ii) has paid in full all
taxes and assessments payable or is diligently pursing with the appropriate
authority any dispute the Contributor has regarding any unpaid taxes or
assessments as of the Closing Date.
9.29 Special Filings. The Contributor is not required to submit any
notice, report or other filing to any governmental or regulatory authority in
connection with the execution, delivery or performance of this Agreement or any
document or instrument executed and delivered in connection herewith or the
consummation of the transactions contemplated hereby other than the filing of
the tax returns required by the terms of this Agreement; and no consent,
approval or authorization of any governmental or regulatory authority is
required to be obtained by the Contributor in connection with the execution,
delivery or performance of this Agreement or the consummation of the
transactions contemplated hereby.
9.30 [Intentionally Omitted]
9.31 Books and Records. The books and records of the Contributor with
respect to each Property, all of which have been or will be made available to
the Company and the Partnership, are, and will be at all times until Closing,
complete and correct in all material respects. All of such books and records
shall be delivered to the Company prior to the Closing.
9.32 No Brokers. Except as set forth on the Disclosure Schedule, the
Contributor has not dealt with any agent, broker or other person acting pursuant
to express or implied authority of the Contributor, and no person or entity is
entitled to a commission or finder's fee in connection with the contribution
described by this Agreement or will be entitled to make any claim against the
Company, or the Partnership for a commission or finder's fee by reason of the
Contributor having engaged him/her/it.
9.33 All Material Information. With respect to all information,
statements, representations and warranties made herein, any agreements or
documents contemplated hereby, any schedules or exhibits hereto, and any
certificates or instruments delivered in connection herewith, the Contributor
hereby represent and warrant that no information, statement, representation or
warranty herein or therein contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances in which made, not
misleading; or necessary in order to provide the Partnership or the Company with
true, accurate and complete information. The Contributor has no knowledge or
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information of any facts, circumstances or conditions which do or could (whether
by the passage of time or the giving of notice or both) materially and adversely
affect any Property or the operation or intended use of the same.
9.34 Survival of Warranties, Representations and Covenants. The
foregoing representations and warranties shall not be affected by any
investigation or verification made by or on behalf of the Company or the
Partnership. The representations, warranties and covenants of Contributors made
in this Agreement shall survive the Closing and consummation of the transactions
contemplated hereby, and shall remain in full force and effect so long as the
Company or the Partnership provides the Contributor with written notice of any
breach, violation or right to indemnification thereunder within a period ending
24 months from the date of this Agreement, except that in the case of any claim
arising out of the representations or warranties herein relating to Section 9.15
(Environmental Matters) and Section 9.24 (Taxes), and Section 9.26 (Employee
Benefit Liabilities), such representations and warranties shall survive in each
case until the applicable statute of limitations has run. After Closing, neither
the Company nor the Partnership shall prosecute any claim against the
Contributor for a breach of the foregoing representations and warranties if the
Company or the Partnership have obtained actual knowledge of such breach prior
to Closing.
X. [INTENTIONALLY OMITTED]
XI. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE PARTNERSHIP
The Partnership and the Company, jointly and severally, represent and
warrant to the Contributor that the following are true, complete and correct as
of the date of this Agreement and as of the Closing:
11.1 Organization, Good Standing and Qualification. Each of the
Company and the Partnership (i) is an entity duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization,
(ii) has all requisite power and authority to carry on its business and own or
lease and operate its assets and properties in the manner in which it is being
conducted and owned or leased and operated, as the case may be, and (ii) is duly
qualified to transact business and is in good standing in all jurisdictions
where its ownership, lease or operation of its properties or assets or the
conduct of its business requires such qualification.
11.2 Authorization. The execution and delivery of this Agreement and
all agreements, documents and instruments contemplated hereby and the
performance of all transactions contemplated herein or therein, have been duly
and validly authorized by all requisite action by the Company and its board of
trustees; and by all requisite action of the Partnership. This Agreement and the
agreements, documents and instruments executed and delivered in connection
herewith constitute the legal, valid and binding obligation of each of the
Company and the Partnership, enforceable in accordance with their respective
terms, subject to applicable bankruptcy,
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insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity) and except to the
extent that rights to indemnification and contribution under or contemplated by
this Agreement or such other agreements may be limited by federal or state
securities laws or public policy relating thereto.
11.3 No Violation. The execution and delivery of this Agreement and
the agreements, documents and instruments executed and delivered in connection
herewith, the consummation of the transactions hereby or thereby, and the
operation of any Property shall not: (i) conflict with, violate, or result in a
breach of, the terms, conditions or provisions of, or constitute a default
under, any agreement, contract, Mortgage, deed, lease, license, franchise or
instrument to which the Company or the Partnership is a party or is subject;
(ii) constitute a violation of any applicable code, resolution, law, statute,
regulation, ordinance, rule, judgment, decree or order to the Company or the
Partnership; or (iii) violate any provision of the organizational documents of
the Company or the Partnership.
11.4 Public Offering. At the time of Closing, (i) the Company's Form
S-11 Registration Statement will comply with applicable federal securities laws
and regulations and will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein in order to make
the statements therein not misleading, and (ii) the Company's Shares shall be
listed and traded on The Nasdaq Stock Market National Market and there will have
been no suspension of trading in such Shares.
11.5 Tax Status. As of the Closing, the Partnership will be qualified
as a partnership for Federal income tax purposes, and the Company will be
qualified as a real estate investment trust organized under the laws of the
State of Maryland.
11.6 No Litigation. Neither the Partnership nor the Company is
involved in any pending or, to its knowledge, threatened litigation that would
materially or adversely effect its operations or financial condition or the
ability to perform under this Agreement or the Partnership Agreement.
11.7 No Brokers. Except as set forth in the Disclosure Schedule,
neither the Partnership nor the Company has dealt with any agent, broker or
other person acting pursuant to express or implied authority of either such
party, and no person or entity is entitled to a commission or finder's fee in
connection with the transactions contemplated by this Agreement or will be
entitled to make any claim against any Contributor for a commission or finder's
fee by reason of the Company or the Partnership having engaged him/her/it.
11.8 Survival. The representations and warranties of the Company and
the Partnership made in this Section 11 shall survive the Closing and
consummation of the transactions contemplated hereby, and shall remain in full
force and effect so long as the Contributor provides
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the Company or the Partnership with written notice of any breach, violation or
right to indemnification thereunder within a period ending twenty-four (24)
months from the date of this Agreement. After Closing, the Contributor shall not
prosecute any claim against the Company or the Partnership for a breach of the
foregoing representations and warranties if the Contributor obtained knowledge
of such breach prior to Closing.
XII. COVENANTS
12.1 Covenants of the Company and the Partnership. Each of the Company
and the Partnership hereby covenants as follows:
12.1.1 [Intentionally Omitted]
12.1.2 If this Agreement is terminated for any reason, (a) the
Partnership and the Company shall promptly return to
Contributors all materials furnished by Contributors to the
Partnership and the Company pursuant to this Agreement, and (b)
the Partnership and the Company shall promptly restore the
Properties to substantially the same condition in which they
existed immediately before any physical tests conducted by or
on behalf of the Partnership and the Company pursuant to the
purposes of this Agreement.
12.1.3 Prior to the Closing Date, except as may be required to be
disclosed by law (including federal and state securities laws,
and the rules and regulations thereunder), regulation or legal
process, or unless otherwise consented to in writing by the
Contributors, which consent shall not be unreasonably withheld,
the Partnership and the Company shall keep all information
learned by the Partnership and the Company in connection with
the Properties or any operation thereof confidential.
12.1.4 In connection with inspection of the Properties, the
Partnership and the Company shall not unreasonably interfere
with any Prior Occupants or any Contributor's business
operations.
12.1.5 The Partnership shall not sell, repay Mortgage Debt, finance,
refinance or otherwise take any actions that are prohibited
with respect to any specified Properties to the extent
described on Schedule 12.1.5. Notwithstanding the provisions of
this Section, the Partnership may (A) at any
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time, sell or exchange one or more of the Properties in a "like
kind exchange" under Section 1031 the Code (or any successor or
similar section) in which no gain is recognized by the
Partnership and reasonable provisions are made (such as by
substituted debt) to avoid triggering gain to the Contributor,
or (B) sell properties upon the repurchase of the Units for
cash, conversion of the Units to Shares or the transfer of the
Units. Notwithstanding the provisions of this Section, the
Company may sell the Properties which relate to the: (1)
closure of the Dealership on such Property due to termination
of the Franchise Agreement, (2) sale of the Dealership on such
Property, or (3) closure of the Dealership on such Property for
any reason if a new Dealership does not open on such Property
with 24 months, unless expressly waived by the Company.
12.1.6 The Partnership shall be entitled from time to time as
necessary to seek and rely on a certificate, signed either by
the Transfer Agent or by the holders of a majority of the then
outstanding Initial Units issued hereunder to the Contributors,
of the basis and at risk amounts relevant to the provisions of
this Section.
12.1.7 For purposes of Section 704(c) of the Code, the Partnership
will use the traditional with ceiling method of making
allocations respecting all properties contributed to the
Partnership at or before the Closing. For purposes of this
Section 12.1.7, upon disposition of a Property, the Partnership
may make a curative allocation of the type described in
Treasury Regulation Section 1.704-3(c)(3)(iii)(B).
12.1.8 So long as the Contributors and their Permitted Transferees
hold 10% or more of the Initial Units, the Company agrees that
from and after the Closing Date substantially all of the
Company's business for profit shall be conducted by or through
the Partnership; provided, however, that business may be
conducted through the Company or a Company subsidiary provided
that all labor, services and goods furnished by the Company or
its subsidiary shall be at the cost of such entity,
substantially all of the pecuniary benefit derived from such
activity shall inure to the benefit of the Partnership, and the
Company shall not make any distributions to its shareholders
from any funds, other than
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distributions that the Company receives from the Partnership in
respect of its Units.
12.1.9 The parties acknowledge and agree that the Contributors and
their affiliates are required under this Agreement and the
Company Leases to provide to the Company certain confidential
financial information (the "Confidential Information") with
respect to the business conducted on the Leased Properties. The
Company agrees to use the Confidential Information solely for
the purposes of monitoring compliance with the terms of this
Agreement and the Company Leases, and the Confidential
Information shall be disclosed only to those of the Company's
employees, advisors and consultants to whom it is necessary for
such purposes. Moreover, the Company will use its best efforts
to implement policies and procedures at the Board of Trustees
level so as to minimize the disclosure of Confidential
Information to Trustees having interest in businesses that
compete with the Contributors and their affiliates.
12.2 Covenants of the Contributors and the Contributing Entities. The
Contributor hereby covenants and agrees as follows:
12.2.1 [Intentionally Omitted]
12.2.2 If this Agreement is terminated as to all Properties for any
reason, the Contributor shall promptly return to the Company or
the Partnership, as the case may be, all materials furnished by
the Company or the Partnership, to such Party pursuant to this
Agreement.
12.2.3 The Contributor shall keep all information learned by such
party in connection with the Partnership or the Company or any
operation thereof confidential.
12.2.4 On the Closing Date, each Contributor shall enter or shall
cause such other party as is reasonably requested by the
Company or the Partnership to enter into the Company Leases and
such service or other agreements as the Company and the
Partnership shall request.
12.2.5 In the event that facts or circumstances are discovered or
develop that could form the basis of an Environmental Claim
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with respect to a specific Property or Properties, the
Contributor(s) of such Property or Properties shall take all
actions necessary to fully address such circumstances,
including, without limitation, providing notice to appropriate
governmental authorities; conducting environmental studies,
sampling and testing procedures; taking remedial action; and
modifying operations or physical facilities to otherwise
eliminate potential liability and ensure full compliance with
the Environmental Laws. Without limiting the foregoing, each
Contributor shall ensure that it has identified any underground
storage tanks ("USTs") used in conjunction with its operations
and that all registration, investigation, remedial action and
technical upgrade requirements have been complied with fully in
respect of each such UST.
12.3 No Claim Against Contributed Property. Each Contributor hereby
represents, warrants, covenants and agrees that, as of the Closing Date,
he/she/it: (i) will have no claim of any kind or nature against any Property by
reason of the execution of this Agreement; (ii) hereby waives, releases and
discharges any claim he/she/it has or may have; and (iii) shall not make any
claim or bring any action against any Property or the Company or the Partnership
for or in respect thereof. Notwithstanding Section 9.34, this representation,
warranty, covenant and agreement shall survive the closing of the transactions
contemplated hereby and shall continue in effect.
12.4 DRO Election; Bottom Guaranty Election.
12.4.1 The Partnership hereby agrees to send to each Contributor (the
"Annual Notice") who holds Initial Units the following
information on an annual basis at least 30 days prior to the
filing of the tax return of the Partnership:
a. the amount of the debt secured by the Partnership's
properties and the amount of the Partnership's total
recourse, non-recourse and partner non-recourse debt as of
the end of the most recent fiscal year;
b. the amount of recourse, nonrecourse, and partner non-
recourse debt allocated to each such Contributor;
c. the adjusted basis of the Partnership's properties as of
the end of the most recent fiscal year; and
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d. the projected taxable income or loss of the Partnership for
such fiscal year.
12.4.2 Each Contributor who holds Initial Units, at its written
election but with no obligation to do so, may affirmatively
make on an annual basis (a) a DRO Election or (b) a Bottom
Guaranty Election. Any such election shall be made by notice
delivered to the Partnership no later than the 30th day after
the Annual Notice was given.
12.4.3 A DRO Election shall state that if the Contributor has a
deficit balance in its capital account following the
liquidation of the Contributor's interest in the Partnership or
the liquidation of the Partnership, as the case may be, such
Contributor shall contribute to the capital of the Partnership,
no later than the end of the fiscal year during which the
Contributor's interest in the Partnership is liquidated or
during which the Partnership is liquidated, as the case may be
(or, if later, 90 days after the date on which the
Contributor's interest in the Partnership is liquidated, as the
case may be) (the "Liquidation Date") an amount of money equal
to a designated portion of the deficit in the Contributor's
capital account. The term "liquidation" shall have the meaning
given to it in Treas. Regs. Section 1.704-1.
12.4.4 A Bottom Guaranty Election shall state that if the Partnership
shall be in default with respect to the Mortgage securing any
of the properties of the Partnership, then the Contributor
agrees to contribute to the capital of the Partnership a
designated portion of the principal balance of such Mortgage
(the "Contribution Limit"); however, such contribution shall
only occur if the mortgage lender shall have exhausted all of
its remedies against such property in order to collect the
amount owing the mortgage lender, and such Contribution Limit
shall be reduced on a dollar-for-dollar basis for every dollar
received by the mortgage lender from exercising such remedies.
Any such contribution shall be made by the Liquidation Date.
For example, if the amount of the Mortgage were $10,000,000 and
the amount of the Contribution Limit were $1,000,000, the
capital contribution would only be required if the Property
were sold in foreclosure and the proceeds of sale were less
than $1,000,000. In the event that more than one Partner
submits
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a Bottom Guaranty Election with respect to the same debt, the
Partnership shall notify each such Partner and allow such
Partners to appropriately modify their respective Bottom
Guaranty Elections.
12.4.5 Limitations on Indebtedness. The Company will use its best
efforts to maintain Mortgage Debt with respect to the
Properties and in the amounts as described on Schedule 12.4.5,
until such time as the number of outstanding Units issued to
the Contributor hereunder is not more than the number of Units
specified on such Schedule.
XIII. DUE DILIGENCE PERIOD
13.1 Due Diligence Period. The period from the date hereof until the
Closing Date is referred to herein as the "Due Diligence Period."
13.2 Access to Properties and Materials. During the Due Diligence
Period and upon twenty-four (24) hours prior notice, the Company and the
Partnership and their agents, engineers, surveyors, appraisers, auditors,
counsel and other representatives shall have the right to enter upon the
Properties to inspect, examine, survey, obtain engineering inspections and
environmental studies, appraise, and otherwise do that which, in the opinion of
the Partnership and the Company, is necessary to determine the boundaries,
acreage and condition of the Properties and to determine the suitability of the
Properties for the uses intended by the Partnership (including, without
limitation, inspect, review and copy any and all documents in the possession or
control of Contributors, or their respective agents, contractors or employees,
and which pertain to the construction, ownership, title, use, occupancy or
operation of the Properties or any part thereof). During the Due Diligence
Period, the Contributors, at their expense and at such times as will not
unreasonably interfere with the business being conducted on the Property or
hinder the Partnership's due diligence review, shall make available to the
Company and the Partnership copies or originals of all of their respective
books, files and records relating in any way to the Properties, complete copies
(or originals when requested) of all title information and title insurance
policies, easements, leases, brokerage agreements, licenses, permits, surveys,
zoning information, environmental reports, structural reports, violation or
default notices, contracts, tax bills and assessments, information regarding
pending or threatened claims, suits or proceedings, and all consents and other
documents required to be obtained for the completion of the transactions
contemplated hereunder.
13.3 Adjustment Following Due Diligence. If the Company determines
that one or more representations or warranties or any information included on
any Disclosure Schedule relating to any Property is incomplete or inaccurate in
any material respect (the "Non-Conforming Property"), the Company shall have the
option to: (a) proceed with the transactions contemplated hereby, (b) declare
this Agreement null and void in which case no party shall have any rights or
obligations under this Agreement, or (c) terminate this Agreement with respect
to such Non-
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conforming Property and proceed with the transactions hereby with respect to the
other Properties, in which case the number of Units issuable hereunder shall be
reduced by the Contribution Value of such Non-Conforming Property.
Notwithstanding anything herein to the contrary, if the Partnership exercises
its rights under Section 13.3(c) above with respect to any Non-Conforming
Property other than due to a title defect (pursuant to Section 5.3) or a
misrepresentation or breach of any environmental representation, warranty or
covenant (as set forth in Section 9.15), then the Contributors shall have the
option of declaring this Agreement null and void with respect to all Properties.
XIV. DEFAULTS AND REMEDIES
14.1 Indemnification by Contributors. The Contributors, jointly and
severally (each, for purposes of Sections 14.1 and 14.2, a "Contributor
Indemnifying Party"), shall indemnify, defend and hold harmless the Partnership,
the Company and their respective shareholders, partners, trustees, officers,
agents, representatives, employees, Affiliates, successors and assigns
(collectively, for purposes of this paragraph, the "Company Indemnified
Parties") from and against any and all losses, damages, claims, liabilities,
actions, suits, proceedings and costs and expenses of investigation or defense
thereof, including attorneys' fees payable as incurred, arising out of or
relating to any (a) misrepresentation or breach of warranty by such Contributor
Indemnifying Party or nonfulfillment of any covenant or agreement to be
performed or complied with by such Contributor Indemnifying Party under this
Agreement and any agreement, document, instrument, certificate, schedule or
exhibit contemplated hereby; (b) untrue or incomplete statement of a material
fact contained in any statement or information provided by such Contributor
Indemnifying Party or based on any omission to state therein a material fact
required to be stated therein or other information necessary to make the
statements therein not misleading; (c) any debts, liabilities or obligations
(whether known or unknown, disputed or undisputed, fixed, contingent or
otherwise) associated with or relating to any of the Contributor Indemnifying
Parties, their officers, directors, partners, trustees or Affiliates or the
Properties, or secured by any of the Contributor Indemnifying Parties, or by any
of the Properties, except those specified on Schedule 9.23 hereto, including any
obligations under any of the Leases and Service Contracts, to the extent any
such obligation was to be performed prior to the Closing Date, or was to be
performed after the Closing Date as a result of a breach or default under any of
the Leases or Service Contracts by the Contributor Indemnifying Parties or their
Affiliates prior to the Closing Date; (d) any action taken, or any failure to
act, by such Contributor Indemnifying Party in connection with this transaction
and the transactions contemplated herein constituting a breach of this Agreement
or any agreement, document or instrument contemplated hereby or a breach of a
duty owed to any person, including, without limitation, any action taken to
redeem or otherwise liquidate the interest of certain holders in anticipation of
the transactions contemplated herein, to the extent such action or failure to
act results in a violation (or alleged violation) of applicable laws or of the
fiduciary duties owed to such holders; (e) pollution or threat to human health
or the environment, or any Environmental Claim against any person or entity
whose liability for such Environmental Claim the Contributors have assumed or
retained either contractually or by operation of law, that is related in any way
to any of the Properties, including, without limitation, all on-site and off-
site activities relating to any of the
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Properties involving Substances of Concern, and that occurred, existed, arises
out of conditions or circumstances that occurred or existed, or was caused, in
whole or in part, on or before the Closing Date, whether or not the pollution or
threat to human health or the environment, or the existence of any Environmental
Claim, is known to the Contributor Indemnifying Parties; (f) regardless of
whether it arises as a breach of any representation or warranty, any debts,
liabilities or obligations of the Contributor Indemnifying Parties (whether
known or unknown, disputed or undisputed, fixed, contingent or otherwise) of,
associated with or relating to any asset or property other than the Properties,
except those specified on Schedule 9.23 hereto; and (g) any and all damages and
expenses incident to any of the foregoing or to the enforcement of this Section
14.2.
14.2 Remedies.
14.2.1 Subject to subsection 14.2.2 and 14.2.3 hereof, after the
Closing hereunder, the Company or the Partnership, in the event
of a breach of any representation or warranty under Section 9
hereof, also may proceed against the person or entity
identified on Schedule 14.2.1 personally (the "Personal
Indemnitor").
14.2.2 Each Contributor Indemnifying Party shall be fully responsible
and severally liable for any of the following and any and all
losses, damages, claims, liabilities, actions, suits,
proceedings and costs and expenses of defense thereof,
including attorneys' fees payable as incurred, arising out of
or relating to: (a) each representation and warranty made by
he/she/it hereunder relating to or associated with title to
his/her/its interest in any Property, his/her/its ability to
convey his interest as contemplated by this Agreement, and
his/her/its representations under Section 9.4 hereof; (b)
regardless of whether it arises as a breach of any
representation or warranty, any debts, liabilities or
obligations (whether known or unknown, disputed or undisputed,
fixed, contingent or otherwise) of, associated with or relating
to any of the Contributor Indemnifying Parties or the
Properties, or secured by any of the Contributor Indemnifying
Parties or by any of the Properties, except those specified on
Schedule 9.23 hereto, and (c) regardless of whether it arises
as a breach of any representation or warranty, any debts,
liabilities or obligations of the Contributor Indemnifying
Parties (whether known or unknown, disputed or undisputed,
fixed, contingent or otherwise) of, associated with or relating
to any other asset or property other than the Properties,
except those specified on Schedule 9.23 hereto.
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14.2.3 Each Contributor hereby represents, warrants, covenants and
agrees that he/she/it presently has, a tangible net worth (such
term meaning net worth exclusive of the value (if any) of
goodwill, going concern value and similar assets, but inclusive
of the value of shares of stock, interests in partnerships and
other business enterprises and similar assets) of not less than
the aggregate Contribution Amounts, minus all Mortgage Debt for
all Properties being acquired by the Partnership pursuant to
this Agreement.
14.3 Indemnification by the Company and the Partnership. The Company
and the Partnership (each, for purposes of this Section 14.3, a "Company
Indemnifying Party") shall indemnify, defend and hold harmless each Contributor
and their respective shareholders, partners, directors, officers, partners,
agents, employees, Affiliates, successors and assigns (collectively, for
purposes of this paragraph, "Contributor Indemnified Parties") from and against
any and all losses, damages, claims, liabilities, actions, suits, proceeds and
costs and expenses of defense therefore, including attorneys' fees payable as
incurred, arising out of or relating to any (a) misrepresentation or breach of
warranty by such Company Indemnifying Party or nonfulfillment of any covenant or
agreement to be performed or complied with by such Company Indemnifying Party
under this Agreement; (b) untrue or incomplete statement (or allegation by a
third party of an untrue or incomplete statement) of a material fact contained
in any statement or information provided by such Company Indemnifying Party or
based on any omission (or allegation by a third party of an untrue or incomplete
statement) to state therein a material fact required to be stated therein or
other information necessary to make the statements therein not misleading, to
the extent such alleged untrue or incomplete statement or omission was made with
the Company's or the Partnership's knowledge that the statement was untrue or
incomplete or omitted to state a material fact; (c) any debts, liabilities or
obligations (whether known or unknown, disputed or undisputed, fixed, contingent
or otherwise) specified on Schedule 9.23 hereto or arising and incurred after
the Closing Date (other than as a result of a breach by any Contributor of any
representation, warranty, covenant or agreement hereunder), including the
obligations under any Service Contracts that survive the Closing Date, to the
extent any such obligation is to be performed after the Closing Date, except to
the extent any such obligation is to be performed after the Closing Date as a
result of a breach or default under any of the Leases or Service Contracts by
the Contributor prior to the Closing Date; and (d) any and all damages and
expenses incident to any of the foregoing or to the enforcement of this Section
14.3.
14.4 Indemnification Procedures. All claims for indemnification under
this Article 14 shall be asserted and resolved as follows:
14.4.1 In the event that any Contributor Indemnified Party or Company
Indemnified Party (the "Indemnified Party") has a Claim against
any Contributor Indemnifying Party or
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Company Indemnifying Party obligated to provide indemnification
pursuant to Sections 14.1 or 14.2 hereof, on the one hand, or
Section 14.3 hereof, on the other hand (the "Indemnifying
Party"), which does not involve a claim being asserted against
or sought to be collected by a third party, the Indemnified
Party shall with reasonable promptness send a written notice
(the "Claim Notice") with respect to such claim to the
Indemnifying Party. If the Indemnifying Party does not notify
the Indemnified Party within the fifteen days thereafter (the
"Notice Period") that the Indemnifying Party disputes such
claim, the amount of such claim shall be conclusively deemed a
liability of the Indemnifying Party hereunder. In case an
objection is made in writing in accordance with this Section
14.4.1, the Indemnified Party shall have thirty (30) days to
respond in a written statement to the objection. If after such
thirty (30) day period there remains a dispute as to any
claims, the parties shall attempt in good faith for sixty (60)
days to agree upon the rights of the respective parties with
respect to each of such claims. If the parties should so agree,
a memorandum setting forth such agreement shall be prepared and
signed by both parties.
14.4.2 In the event that any claim for which the Indemnifying Party
would be liable to an Indemnified Party hereunder is asserted,
or any action or proceeding commenced, against an Indemnified
Party by a third party, the Indemnified Party shall with
reasonable promptness notify the Indemnifying Party of such
claim, specifying the nature of such claim and the amount or
the estimated amount thereof to the extent then feasible (which
estimate shall not be conclusive of the final amount of such
Claim) (the "Third Party Claim Notice"). The Indemnifying Party
shall have 30 days from the receipt of the Claim Notice (the
"Third Party Notice Period") to notify the Indemnified Party
(a) whether or not such party disputes the liability to the
Indemnified Party hereunder with respect to such claim and (b)
if such party does not dispute such liability, whether or not
the Indemnifying Party desires, at the sole cost and expense of
the Indemnifying Party, to defend against such claim, provided
that such party is hereby authorized (but not obligated) prior
to and during the Third Party Notice Period to file any motion,
answer or other pleading and to take any other action which the
Indemnifying Party shall deem necessary or appropriate to
protect the
-41-
Indemnifying Party's interests. In the event that the
Indemnifying Party notifies the Indemnified Party within the
Third Party Notice Period that the Indemnifying Party does not
dispute the Indemnifying Party's obligation to indemnify
hereunder and desires to defend the Indemnified Party against
such claim, except as hereinafter provided, such party shall
have the right to defend by appropriate proceedings. No non-
monetary settlement of any such matter shall be entered into
without the written consent of the Indemnified Party, which
consent shall not be unreasonably withheld; provided that,
unless the Indemnified Party otherwise agrees in writing, such
party may not settle any matter (in whole or in part) unless
such settlement includes a complete and unconditional release
of the Indemnified Party. If the Indemnified Party desires to
participate in, but not control, any such defense or settlement
the Indemnified Party may do so at its sole cost and expense.
If the Indemnifying Party elects not to defend the Indemnified
Party against such claim, whether by failure of such party to
give the Indemnified Party timely notice as provided above or
otherwise, then the Indemnified Party, without waiving any
rights against such party, may settle or defend against any
such claim in the Indemnified Party's sole discretion and the
Indemnified Party shall be entitled to recover from the
Indemnifying Party the amount of any settlement or judgment to
the extent the Indemnified Party is entitled to indemnification
and, on an ongoing basis, all indemnifiable costs and expenses
of the Indemnified Party with respect thereto, including
interest from the date such costs and expenses were incurred.
14.4.3 If at any time, in the reasonable opinion of the Indemnified
Party, notice of which shall be given in writing to the
Indemnifying Party, any such claim seeks material prospective
or other relief which could have a materially adverse effect on
the assets, liabilities, financial condition, results of
operations or business prospects of any Indemnified Party or in
the reasonable opinion of counsel for the Indemnified Party a
conflict exists, the Indemnified Party shall have the right to
control or assume (as the case may be) the defense of any such
claim and the amount of any judgment or settlement and the
reasonable costs and expenses of defense shall be included as
part of the indemnification obligations of the Indemnifying
Party hereunder. If the
-42-
Indemnified Party should elect to exercise such right, the
Indemnifying Party shall have the right to participate in, but
not control, the defense of such claim or demand at the sole
cost and expense of the Indemnifying Party.
14.4.4 Nothing herein shall be deemed to prevent the Indemnified Party
from making a claim, and an Indemnified Party may make a claim
hereunder, for potential or contingent claims or demands
provided the Claim Notice or Third Party Claim Notice, as the
case may be, sets forth the specific basis for any such
potential or contingent claim or demand to the extent then
feasible and the Indemnified Party has reasonable grounds to
believe that such a claim or demand may be made.
14.4.5 The Indemnified Party's failure to give reasonably prompt
notice as required by this Section 14.4 of any actual,
threatened or possible claim, demand, action or proceeding
which may give rise to a right of indemnification hereunder
shall not relieve the Indemnifying Party of any liability which
the Indemnifying Party may have to the Indemnified Party unless
the failure to give such notice materially and adversely
prejudiced the Indemnifying Party or increases the amount of
indemnification which the Indemnifying Party is obligated to
pay hereunder. In any such event, the amount of indemnification
which the Indemnified Party will be entitled to receive
hereunder shall be reduced to an amount which the Indemnified
Party would have been entitled to receive had such notice been
timely.
XV. MISCELLANEOUS
15.1 Assignment. Neither this Agreement nor any interest hereunder may
be assigned or transferred by any Contributor, the Company or the Partnership
without the prior written consent of the parties hereto.
15.2 Entire Agreement. Any prior agreement or understanding among the
parties concerning the subject matter hereof is hereby superseded. This
Agreement constitutes the entire agreement among the parties with respect to the
subject matter hereof and the transactions contemplated herein and shall not be
modified or amended except in a written document signed by all of the parties
hereto.
15.3 Notices. All notices or other communications required or
permitted under this Agreement shall be in writing and delivered personally or
by registered or certified mail,
-43-
return receipt requested, postage prepaid, or by a nationally recognized
overnight courier (such as Federal Express) with receipted delivery. Notices to
the parties shall be addressed as follows:
If to the Contributors to the addresses contained in Schedule I; with a
copy to:
G. Xxxxxx Xxxxxx, Esq.
Surovell, Xxxxxxx, Xxxxxx & Xxxxx, P.C.
0000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
If to the Partnership or to the Company:
Capital Automotive REIT
0000 Xxxxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, President and Chief Executive Officer
[THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]
-44-
With a copy to:
Xxxxxx, Xxxxxx & Xxxxxxxxx
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
All notices given in accordance with the terms hereof shall be deemed
effective (a) if delivered in person or by overnight courier, on the business
day it is delivered, and (b if sent by registered or certified mail, three (3)
business days after deposit with the U.S. mail. Any party hereto may change its
address by written notice to all parties hereto sent in accordance with the
terms of this Section and any such Notice of change of address shall be
effective five (5) days after delivery.
15.4 Governing Law. This Agreement shall be governed and interpreted
in accordance with the laws of the Commonwealth of Virginia without regard to
its principles of conflicts of laws, and any action brought under or arising out
of this Agreement or the matters relating hereto shall be submitted to the
jurisdiction of the United States District Court for the Eastern District of
Virginia. Each party acknowledges and agrees to such jurisdiction.
15.5 Litigation Costs. If there is any legal action or proceeding
between the parties hereto arising from or based upon this Agreement, the
unsuccessful party to such action or proceeding shall pay to the prevailing
party all litigation costs and expenses, including reasonable attorneys' fees,
incurred by such prevailing party in such action or proceeding and in any appeal
in connection therewith, and if such prevailing party recovers a judgment in any
such action, proceeding or appeal, such costs, expenses and attorneys' fees
shall be included in as part of such judgment.
15.6 Counterparts. This Agreement may be executed in any number of
identical counterparts, any or all of which may contain the signatures of fewer
than all of the parties but all of which shall be taken together as a single
instrument.
15.7 Offer and Acceptance. This Agreement constitutes an offer by the
Company and the Partnership which must be accepted, by delivery to the Company
of a duly signed and completed signature page hereof, by all of the Contributors
within five (5) days after the date this Agreement is signed by the Company and
the Partnership.
15.7.1 If, within such time period, less than all of the persons
owning any interest in a Contributor shall have signed this
Agreement, then the Contributor and the Property owned by such
Contributor shall, at the sole option of the Company, be
excluded from the Contribution hereunder, this Agreement shall
remain in full force and effect as to the other Contributors
and Properties, and an appropriate adjustment
-45-
shall be made with respect to the relevant Property, in which
case the number of Units issuable hereunder as set forth on
Schedule 1.3(a) shall be reduced by the Contribution Value of
such Property as provided in this Agreement; if after the
expiration of such time period all of the Contributors execute
this Agreement, the Company, at its sole option, may elect to
re-include, or may continue to exclude, any such Contributor
and Property.
15.7.2 If any Contributor hereunder is not an "accredited investor" as
defined in the Act, then the Company, at its sole option, may
exclude any such Contributors and any such Property from the
Contribution hereunder, this Agreement shall remain in full
force and effect as to the other Contributors and Properties,
and an appropriate adjustment shall be made with respect to the
relevant Property, in which case the number of Units issuable
hereunder as set forth on Schedule 1.3(a) shall be reduced by
the Contribution Value of such Property as provided in this
Agreement; if thereafter all Contributors become accredited
investors, then the Company, at its sole option, may elect to
re-include, or may continue to exclude, any such Contributors
and Property.
15.8 Arbitration. In the event a dispute arises between the parties as
to any of the requirements of this Agreement or the performance under this
Agreement, which the parties are unable to resolve, the parties agree to waive
the remedy of litigation (except for extraordinary relief in an emergency
situation) and agree that such dispute or disputes shall be determined by
arbitration. Notwithstanding the foregoing, the parties acknowledge and agree
that this Section 15.8 is not intended to create new rights.
[THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]
-46-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal, with the intention that it be a sea ed instrument, as of the date set
forth above.
WITNESS CAPITAL AUTOMOTIVE REIT
By: /s/ Xxxx Xxxxx By: /s/ Xxxxxx Xxxxxx (SEAL)
Name: Xxxx Xxxxx Name: Xxxxxx Xxxxxx
Title: Title: President and Chief Executive Officer
CAPITAL AUTOMOTIVE L.P.
WITNESS By: Capital Automotive REIT, as General
Partner
By: /s/ Xxxx Xxxxx By: /s/ Xxxxxx Xxxxxx (SEAL)
Name: Xxxx Xxxxx Name: Xxxxxx Xxxxxx
Title: Title: President and Chief Executive Officer
WITNESS CONTRIBUTOR:
XXXXXX INVESTMENTS TWO, LC
By: /s/ Xxxxxxx X. Xxxxxx, XX By: /s/ Xxxxxxx X. Xxxxxx (SEAL)
Name: Xxxxxxx X. Xxxxxx, XX Name: Xxxxxxx X. Xxxxxx
Title: Limited Partner Title: Manager
Address: c/o Vinco, Inc.
00000 Xxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Telephone #: 000-000-0000
Facsimile #: 000-000-0000
Social Security # or TIN: 00-0000000
-47-
WITNESS CONTRIBUTOR:
XXXXXX INVESTMENTS ONE LIMITED
PARTNERSHIP
By: /s/ Xxxxxxx X. Xxxxxx, XX By: /s/ Xxxxxxx X. Xxxxxx (SEAL)
Name: Xxxxxxx X. Xxxxxx, XX Name: Xxxxxxx X. Xxxxxx
Title: Limited Partner Title: General Partner
Address: c/o Vinco, Inc.
00000 Xxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Telephone #: 000-000-0000
Facsimile #: 000-000-0000
Social Security # or TIN: 00-0000000
WITNESS CONTRIBUTOR:
XXXXXXX X. XXXXXX
By: /s/ Xxxxxxx X. Xxxxxx, XX By: /s/ Xxxxxxx X. Xxxxxx (SEAL)
Name: Xxxxxxx X. Xxxxxx, XX Name: Xxxxxxx X. Xxxxxx
Title: Limited Partner Address: c/o Vinco, Inc.
0000 Xxxxx Xxxxxx Xxxx
XxXxxx, Xxxxxxxx 00000
Telephone #: 000-000-0000
Facsimile #: 000-000-0000
Social Security # or TIN: ###-##-####
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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WITNESS CONTRIBUTOR:
XXXXX X. XXXXXX
By: /s/ Xxxxxxx X. Xxxxxx, XX By: /s/ Xxxxx X. Xxxxxx by
Name: Xxxxxxx X. Xxxxxx, XX Xxxxxxx X. Xxxxxx (SEAL)
Title: Limited Partner Name: Xxxxx X. Xxxxxx
Address: 0000 Xxxxx Xxxxxx Xxxx
XxXxxx, Xxxxxxxx 00000
Telephone #: 000-000-0000
Facsimile #: 000-000-0000
Social Security # or TIN: ###-##-####
-49-
XXXXXX CONTRIBUTION AGREEMENT
EXHIBITS
A. Partnership Agreement
4.4(a) Form of Company Lease
4.4(c) Guaranty and Subordination Agreement
7.2.1(i) Investor Questionnaires
7.2.1(p) Lender's Estoppel Certificate
7.2.1(q) Opinion of Contributor's Counsel
7.2.2(f) Opinion of Company Counsel
SCHEDULES
I. Contributors (Names and Addresses)
1.2 Schedule of Properties; Ownership Interests in Properties and
Contribution Amounts
1.3(a) Schedule of Units Issued in Consideration for Each Property
1.3(b) Mortgage Debt
4.1 Prior Occupants
4.4(b) Guaranties
5.1 Scheduled Exceptions
9.6 Material Defaults
9.13 Zoning
9.15.5(a) The Treatment, Storage and Disposal Locations for Substances of
Concern
9.15.5(b) Storage Tanks
9.15.5(c) Existence of Asbestos
9.15.5(f) Environmental Permits and Authorizations
9.16 Insurance
9.19 Lease Disclosures
9.19.2 Leases and Rent Rolls
9.19.13 Other Landlords
9.20(a) Service Contracts
9.20(b) Management Contracts
9.23 Liabilities of Contributors
9.24 Contracts
9.26 Employee Benefit Plans/Employment Contracts/Employee Benefit
Liabilities
12.1.5 Restrictions on Sale and/or Financing of Specified Properties
12.4.5 Limitations on Indebtedness
14.2.1 Indemnitors
EXHIBIT A
PARTNERSHIP AGREEMENT
To be delivered at Closing.
EXHIBIT 4.4(A)
FORM OF COMPANY LEASE
LEASE AGREEMENT
BETWEEN
CAPITAL AUTOMOTIVE L.P., LANDLORD
AND
[ ], TENANT
DATED: ____________, 1997
2
ARTICLE I
LEASE AGREEMENT, LEASED PROPERTY AND TERM..................... 1
1.01 Lease Agreement......................................... 1
1.02 Contingent Upon Acquisition of the Leased Property...... 2
1.03 Term.................................................... 2
1.04 Holding Over............................................ 3
1.05 Surrender............................................... 4
ARTICLE II
RENT.......................................................... 4
2.01 Base Rent............................................... 4
2.02 Payment................................................. 4
2.03 Security Deposit........................................ 4
2.04 Base Annual Rent Adjustment............................. 5
2.05 Additional Rent......................................... 5
2.06 Place(s) of Payment of Rent; Direct Payment of
Additional Rent......................................... 5
2.07 Net Lease............................................... 5
2.08 No Termination, Abatement, Etc.......................... 5
ARTICLE III
IMPOSITIONS AND UTILITIES..................................... 6
3.01 Payment of Impositions.................................. 6
3.02 Definition of Impositions............................... 7
3.03 Utilities............................................... 8
3.04 Escrow of Impositions................................... 8
3.05 Discontinuance of Utilities............................. 9
3.06 Liens................................................... 9
ARTICLE IV
INSURANCE..................................................... 9
4.01 Insurance............................................... 9
4.02 Insurance Limits........................................ 11
4.03 Insurance Requirements.................................. 11
4.04 Replacement Cost........................................ 12
4.05 Blanket Policy.......................................... 12
4.06 No Separate Insurance................................... 12
4.07 Waiver of Subrogation................................... 13
4.08 Mortgages............................................... 13
4.09 Other Insurance Requirements............................ 13
ARTICLE V
INDEMNITY; SUBSTANCES OF CONCERN.............................. 14
5.01 Tenant's Indemnification................................ 14
5.02 Substances of Concern................................... 14
5.03 Audits.................................................. 17
5.04 Landlord's Option Re: Compliance........................ 17
5.05 Environmental Indemnification........................... 17
5.06 Tenant's Cleanup Obligation............................. 18
5.07 Existing Environmental Conditions....................... 18
5.08 Survival of Tenant's Obligations........................ 19
ARTICLE VI
USE AND ACCEPTANCE OF PREMISES................................ 19
6.01 Use of Leased Properties................................ 19
6.02 Acceptance of Leased Properties......................... 19
6.03 Conditions of Use and Occupancy......................... 19
6.04 Financial Statements and Other Information.............. 20
ARTICLE VII
REPAIRS, COMPLIANCE WITH LAWS, AND MECHANICS' LIENS........... 20
7.01 Maintenance............................................. 20
7.02 Compliance with Laws.................................... 21
7.03 Required Alterations.................................... 21
7.04 Mechanics' Liens........................................ 21
7.05 Replacements of Fixtures................................ 22
7.06 Encroachments; Restrictions............................. 22
ARTICLE VIII
ALTERATIONS AND SIGNS; TENANT'S PROPERTY; CAPITAL
ADDITIONS TO THE LEASED PROPERTIES............................ 23
8.01 Tenant's Right to Construct............................. 23
8.02 Scope of Right.......................................... 23
8.03 Cooperation of Landlord................................. 24
8.04 Commencement of Construction............................ 24
8.05 Rights in Tenant Improvements........................... 25
8.06 Personal Property....................................... 25
8.07 Requirements for the Tenant's Personal Property......... 25
8.08 Financings of Capital Additions to a Leased Property.... 27
ii
ARTICLE IX
DEFAULTS AND REMEDIES......................................... 27
9.01 Events of Default...................................... 27
9.02 Remedies............................................... 30
9.03 Right of Set-Off....................................... 32
9.04 Performance of Tenant's Covenants...................... 33
9.05 Late Charge............................................ 33
9.06 Litigation; Attorneys' Fees............................ 33
9.07 Remedies Cumulative.................................... 34
9.08 Escrows and Application of Payments.................... 34
9.09 Power of Attorney...................................... 34
ARTICLE X
DAMAGE AND DESTRUCTION........................................ 35
10.01 General................................................ 35
10.02 Landlord's Inspection.................................. 35
10.03 Landlord's Costs....................................... 36
10.04 Rent Abatement......................................... 36
10.05 Substantial Damage During Lease Term................... 36
10.06 Damage Near End of Term................................ 37
10.07 Risk of Loss........................................... 37
ARTICLE XI
CONDEMNATION.................................................. 38
11.01 Total Taking........................................... 38
11.02 Partial Taking......................................... 38
11.03 Restoration............................................ 38
11.04 Landlord's Inspection.................................. 39
11.05 Award Distribution..................................... 39
11.06 Temporary Taking....................................... 39
ARTICLE XII
ADDITIONAL REPRESENTATIONS, WARRANTIES AND FINANCIAL COVENANTS 40
12.01 Organization and Qualification......................... 40
12.02 Material Agreements.................................... 41
12.03 Changes in Condition................................... 41
12.04 Franchises, Licenses, etc.............................. 41
12.05 Litigation............................................. 42
12.06 Authorization and Enforceability....................... 42
12.07 No Legal Obstacle to Lease............................. 42
12.08 Certain Business Representations....................... 43
iii
12.09 Certain Financial Covenants............................ 44
12.10 Cash Flow Coverage Ratio Covenant...................... 45
12.11 Disclosure............................................. 45
12.12 Covenant Not to Acquire................................ 45
ARTICLE XIII
ASSIGNMENT AND SUBLETTING; ATTORNMENT......................... 45
13.01 Prohibition Against Subletting and Assignment.......... 45
13.02 Changes of Control..................................... 46
13.03 Operating/Service Agreements........................... 46
13.04 Assignment............................................. 48
13.05 REIT Limitations....................................... 48
13.06 Attornment............................................. 49
13.07 Severance and Spin-Off................................. 49
ARTICLE XIV
ARBITRATION................................................... 50
14.01 Controversies.......................................... 50
14.02 Appointment of Arbitrators............................. 50
14.03 Arbitration Procedure.................................. 50
14.04 Expenses............................................... 50
14.05 Enforcement of the Arbitration Award................... 51
ARTICLE XV
QUIET ENJOYMENT, SUBORDINATION, ATTORNMENT, ESTOPPEL
CERTIFICATES.................................................. 51
15.01 Quiet Enjoyment........................................ 51
15.02 Landlord Mortgages; Subordination...................... 51
15.03 Attornment............................................. 51
15.04 Estoppel Certificates.................................. 52
15.05 Waiver of Landlord's Lien.............................. 52
ARTICLE XVI
RIGHT OF FIRST OFFER.......................................... 53
16.01 Right of First Offer During Lease Term or
Extension Term......................................... 53
16.02 Right to Purchase at End of an Extension Term.......... 54
ARTICLE XVII
MISCELLANEOUS................................................. 55
17.01 Notices................................................ 55
17.02 Advertisement of a Leased Property..................... 56
17.03 Landlord's Access...................................... 56
iv
17.04 Entire Agreement....................................... 56
17.05 Severability........................................... 57
17.06 Captions and Headings.................................. 57
17.07 Governing Law.......................................... 57
17.08 Memorandum of Lease or Certain Rights Under the Lease.. 57
17.09 Waiver................................................. 57
17.10 Assignment; Binding Effect............................. 57
17.11 Consents and Approvals................................. 57
17.12 Single Property........................................ 58
17.13 Modification........................................... 58
17.14 Incorporation by Reference............................. 58
17.15 No Merger.............................................. 58
17.16 Force Majeure.......................................... 58
17.17 Laches................................................. 58
17.18 Waiver of Jury Trial................................... 58
17.19 Permitted Contests..................................... 59
17.20 Construction of Lease.................................. 59
17.21 Counterparts........................................... 60
17.22 Relationship of Landlord and Tenant.................... 60
SCHEDULES
A Leased Properties
B Permitted Liens
C Base Annual Rent Schedule
EXHIBITS
2.02 Payment Account Information
2.04 Base Annual Rent Adjustment
5.07 Environmental Reports
12.02 Material Agreements
12.03 Changes in Condition
15.02 Form of Subordination and Non-Disturbance Agreement
v
LEASE AGREEMENT
This Lease Agreement ("Lease") dated as of the ______ day of November,
1997 by and between CAPITAL AUTOMOTIVE L.P., a Delaware limited partnership
("Landlord"), having its principal office at [__________________] and [ ],
a ___________ [corporation], having its principal office at
[________________] ("Tenant").
RECITALS
WHEREAS, Tenant or an Affiliate (as hereafter defined) has conveyed or
will convey to Landlord certain parcels of real estate and improvements thereon
upon which Tenant engages in motor vehicle retail and/or motor vehicle related
businesses (the "Business"), which parcels of real estate and improvements
thereon are described on Schedule A attached hereto and incorporated herein by
reference (each hereinafter a "Leased Property" or collectively, the "Leased
Properties"), and Landlord and Tenant desire to provide for the lease by
Landlord to Tenant of the Leased Properties; and
WHEREAS, Landlord and Tenant desire that each of the Leased Properties
shall be the subject of this Lease and be used by Tenant in its operation of the
Business; and
WHEREAS, this Lease provides that additional real estate and
improvements thereon may be made subject to the operation and effect of this
Lease, upon execution by Landlord and Tenant of a Lease Supplement designating
each such additional property as a Leased Property hereunder.
NOW, THEREFORE, in consideration of the foregoing premises and of
their respective agreements and undertakings herein, and of other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, Landlord and Tenant agree as follows:
ARTICLE I
LEASE AGREEMENT, LEASED PROPERTY AND TERM
1.01 Lease Agreement. Landlord does hereby let and lease unto Tenant,
and Tenant does hereby take and hire from Landlord, the Leased Properties, which
shall respectively consist of:
(a) The parcels of land described and located at the addresses listed
in Schedule A hereto, as more particularly described therein,
together with any additional parcels of real estate and
improvements thereon subsequently designated as a Leased Property
by the parties pursuant to a Lease Supplement as provided for
herein, together with all rights, titles, appurtenant interests,
covenants, licenses, privileges and benefits thereto belonging,
and any easements, rights-of-way, rights of ingress or egress or
other interests in, on, or to any land, highway, street, road or
avenue, open
or proposed, in, on, across, in front of, abutting or adjoining
such real property including, without limitation, any strips and
gores adjacent to or lying between such real estate and any
adjacent real estate (the "Land");
(b) All buildings, improvements, structures and Fixtures (as
hereinafter defined) now located or to be located or to be
constructed on the Land, including, without limitation,
sidewalks, landscaping, parking lots and structures, roads,
drainage and all above ground and underground utility structures
and conduits (on-site or off-site), equipment systems and other
so-called "infrastructure" improvements (the "Improvements");
(c) All equipment, machinery, fixtures, and other items of real
and/or personal property, including all components thereof,
located in, on or used in connection with, and permanently
affixed to or incorporated into, the Improvements, including,
without limitation, all furnaces, boilers, heaters, electrical
equipment, heating, plumbing, lighting, ventilating,
refrigerating, incineration, air and water pollution control,
waste disposal, air-cooling and air-conditioning systems and
apparatus, sprinkler systems and fire and theft protection
equipment, and similar systems, all of which, to the greatest
extent permitted by law, are hereby deemed to constitute real
estate, together with all replacements, modifications,
alterations and additions thereto (collectively the "Fixtures");
and
(d) All easements, rights and appurtenances relating to the Land and
the Improvements.
SUBJECT, HOWEVER, to the liens, encumbrances, restrictions,
agreements, and other title matters listed or specifically referred to in
Schedule B ("Permitted Exceptions").
The Leased Properties shall however exclude all furniture, equipment,
inventory and items of moveable personal property attached to the Land or
Improvements that relate to the business being conducted on the Leased Property
which items may readily be removed without material damage to the Land and
Improvements whether or not such items might legally be considered to be
"fixtures" (all of which are owned by Tenant and shall hereinafter be defined as
the "Excluded Personal Property").
1.02 Contingent Upon Acquisition of the Leased Property. In the event
this Lease is executed prior to the conveyance by Tenant or an Affiliate of the
Leased Property to Landlord, the parties acknowledge that the effectiveness of
this Lease in respect of such Leased Property is contingent upon the closing of
such conveyance (the "Commencement Date").
1.03 Term. The initial term of this Lease (the "Term") shall be for a
fixed term of One Hundred and Twenty (120) months commencing on the Commencement
Date. The
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initial term for any Leased Property designated in a Lease Supplement shall
begin on the date of such Lease Supplement and expire at the end of the Term or
then current Extension Term (as hereafter defined), as the case may be. Tenant
shall have the right to extend this Lease for the Leased Properties as a group,
at Tenant's option, for one One Hundred and Twenty (120) month renewal term from
the expiration of the Term (the "First Extension Term"), provided that no Event
of Default (as defined in Section 9.01 hereof) shall exist and be continuing. In
addition, Tenant shall have the right to extend this Lease for the Leased
Properties as a group at Tenant's option, for a second One Hundred and Twenty
(120) month renewal term from the expiration of the First Extension Term (the
"Second Extension Term", each an "Extension Term", and collectively with the
First Extension Term, the "Extension Terms") provided that no Event of Default
(as defined in Section 9.01 hereof) shall exist and be continuing. Tenant shall
exercise the First Extension Term by written notice to Landlord no later than
twelve months prior to the end of the Term. Tenant shall exercise the Second
Extension Term by written notice to Landlord no later than twelve (12) months
prior to the end of the First Extension Term. Notwithstanding anything else to
the contrary in this Agreement, the Rent during the Second Extension Term shall
be the Fair Market Rent (as hereafter defined) for the Leased Property. Fair
Market Rent shall be determined as soon as possible after receipt by Landlord of
Tenant's notice of option exercise, on the basis of appraisals of independent
appraisers selected in accordance with the provisions of Section 16.02(b).
Tenant shall have the right, in its sole discretion, to rescind the exercise of
Tenant's option to extend the Lease for the Second Extension Term during a
period of five (5) business days after the determination of the Fair Market
Rent. If Tenant shall fail to exercise the right to rescind within such five (5)
day period, the election to extend shall be irrevocable and the Fair Market Rent
so determined shall be the Base Annual Rent during the Second Extension Term
notwithstanding any changes in the market rental rates, whether upward or
downward, which may occur after such determination. However, notwithstanding
anything else in this Agreement, Fair Market Rent shall become the Base Annual
Rent (as defined hereafter) and shall be subject to Base Annual Rent Adjustments
as set forth in Section 2.04.
1.04 Holding Over. Should Tenant, without the express consent of
Landlord, continue to hold and occupy any Leased Property after the expiration
or earlier termination of the Term or any Extension Term, as the case may be,
such holding over beyond the Term and the acceptance or collection of Rent (as
defined hereinafter) by Landlord shall operate and be construed as creating a
tenancy from month-to-month and not for any other term whatsoever. During any
such holdover period Tenant shall pay to Landlord for each month (or portion
thereof) Tenant remains in such Leased Property, in lieu of the Base Annual Rent
(as defined hereafter) for such Leased Property, an amount equal to the sum of
one-twelfth (1/12) of (i) one hundred seven percent (107%) of such Base Annual
Rent (the "Holdover Rate"), and (ii) as applicable, one hundred percent (100%)
of the Additional Rent (as defined hereinafter) for such Leased Property and
Other Additional Rent (as defined hereinafter) for such Leased Property, each as
in effect on the expiration date. Said month-to-month tenancy may be terminated
by Landlord by giving Tenant thirty (30) days written notice, and at any time
thereafter Landlord may re-enter and take possession of such Leased Property.
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1.05 Surrender. Except as a result of (a) Tenant Improvements and
Capital Additions (as defined hereinafter); (b) normal and reasonable wear and
tear (subject to the obligation of Tenant to maintain each Leased Property in
good order and repair during the Term); and (c) casualty, taking or other damage
and destruction not required to be repaired by Tenant, Tenant shall surrender
and deliver up each Leased Property at the expiration or termination of the Term
or the Extension Term therefor, as the case may be, broom clean, in good order
and repair, free of the Excluded Personal Property and any additional items of
Tenant's personal property (together with the Excluded Personal Property, the
"Tenant's Personal Property"), all of which Tenant shall remove prior to such
surrender and delivery, and in as good order and condition as of the
Commencement Date.
ARTICLE II
RENT
2.01 Base Rent. Tenant shall pay Landlord annual base rent (the "Base
Annual Rent") as to the Leased Property for each year during the Term or the
Extension Term (each such year a "Lease Year"), which Base Annual Rent shall be
subject to upward adjustment pursuant to Section 2.04. In the first Lease Year,
Base Annual Rent shall be in the amount set forth on Schedule A (the "Initial
Base Annual Rent"), paid to Landlord in twelve equal monthly installments.
2.02 Payment. Tenant shall pay Landlord the Base Annual Rent as to the
Leased Property for each Lease Year, without notice, demand, set-off or
counterclaim in advance, in lawful money of the United States of America and
payable in consecutive monthly installments commencing on the Commencement Date
and thereafter on the first day of each month during the Term. Tenant will, to
the extent that such method of payment is compatible with its business
practices, make such payments by direct deposit of immediately available funds
to the account set forth in Exhibit 2.02 (which Exhibit 2.02 may be modified by
Landlord from time to time upon Notice (as hereafter defined) to Tenant).
2.03 Security Deposit. Prior to the Commencement Date, Tenant shall
deliver to Landlord an amount equal to one-twelfth (1/12th) of the Base Annual
Rent, which amount shall be held by Landlord as security (the "Security
Deposit") for the performance of Tenant's payment and other obligations under
this Lease. Upon an Event of Default and the continuance thereof, Landlord shall
have the right, but not the obligation, to apply the Security Deposit as set
forth in Section 9.08. Landlord shall return the Security Deposit, without
interest, after expiration of this Lease, if Tenant has fully and faithfully
carried out all of the terms, covenants and conditions hereof. In the event that
Landlord eliminates its standard business policy of requiring security deposits
from tenants, then Landlord shall refund the Security Deposit to Tenant within
thirty (30) days of such policy change.
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2.04 Base Annual Rent Adjustment.
(a) The Base Annual Rent shall be adjusted during the Lease Term
or the Extension Terms under the procedures set forth in
Exhibit 2.04 (the "Base Annual Rent Adjustment").
(b) As used in Exhibit 2.04, the "Index" shall mean the CPI-U
published by the United States Department of Labor, Bureau
of Labor Statistics Consumer Price Index for All Urban
Consumers, U.S. City Average. If at any time during the Term
or the Extension Term, as the case may be, the Index shall
be discontinued, Landlord shall select a substitute index,
being an existing official index published by the Bureau of
Labor Statistics or its successor or another, similar
governmental agency, which index is most nearly equivalent
to the Index.
2.05 Additional Rent. As to each Leased Property, in addition to the
Base Annual Rent, Tenant shall pay all other amounts, liabilities, obligations
and Impositions (as hereinafter defined) which Tenant assumes or agrees to pay
under this Lease and any fine, penalty, interest, charge and cost which may be
added for nonpayment or late payment of such items (collectively, the
"Additional Rent").
2.06 Place(s) of Payment of Rent; Direct Payment of Additional Rent.
The Base Annual Rent and Additional Rent are hereinafter referred to as "Rent."
Landlord shall have all legal, equitable and contractual rights, powers and
remedies provided in this Lease or by statute or otherwise in the case of
nonpayment of the Rent for each Leased Property. Tenant shall make all payments
of Rent at Landlord's address set forth in Section 17.01 or as Landlord may
otherwise from time to time direct in writing, or, if Landlord shall direct
Tenant, directly to a bank account specified by Landlord to Tenant in writing.
At the direction of the Landlord, Tenant shall make payments of Additional Rent
directly to the person or persons to whom such amount is owing at the time and
times when such payments are due, and Tenant shall give to Landlord such
evidence of such direct payments as Landlord shall reasonably request.
2.07 Net Lease. This Lease shall be deemed and construed to be an
"absolute net lease" or "triple net lease," (i.e. that Tenant shall pay all
costs and expenses related to the ownership and operations of each Leased
Property, thereby leaving all Rent as an absolutely net return to Landlord) and
as to each Leased Property, Tenant shall pay all Rent, Impositions, and other
charges and expenses in connection with such Leased Property throughout the Term
and any Extension Term, without abatement, deduction or set-off.
2.08 No Termination, Abatement, Etc. Except as otherwise specifically
provided herein, Tenant shall remain bound by this Lease in accordance with its
terms. Except as otherwise specifically provided herein, Tenant shall not,
without the prior written consent of
5
Landlord, modify, surrender or terminate this Lease as to any Leased Property,
nor seek nor be entitled to any abatement, deduction, deferment or reduction of
Rent, or set-off against the Rent as to any Leased Property for any reason
whatsoever. Except as specifically provided herein, the obligations of Landlord
and Tenant shall not be affected by reason of: (a) the lawful or unlawful
prohibition of, or restriction upon, Tenant's use of any Leased Property, or any
part thereof, the interference with such use by any person, corporation,
partnership or other entity, or by reason of eviction by paramount title; (b)
any claim which Tenant has or might have against Landlord or by reason of any
default or breach of any warranty by Landlord under this Lease or any other
agreement between Landlord and Tenant, or to which Landlord and Tenant are
parties; (c) any bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution, winding up or other proceeding affecting
Landlord or any assignee or transferee of Landlord; (d) any damage to, or
destruction of, any Leased Property or any portion thereof for whatever cause,
or any taking of the Leased Property or any portion thereof; or (e) any other
cause, whether similar or dissimilar to any of the foregoing, other than a
discharge of Tenant from any such obligations as a matter of law. Except as
otherwise specifically provided herein, and to the maximum extent permitted by
law, Tenant hereby specifically waives all rights, including but not limited to
any rights under any statute relating to rights of tenants in the jurisdictions
where the Leased Properties are located, which may now be conferred upon it by
law, relating to: (a) the modification, surrender or termination of this Lease,
or the quitting or surrender of any Leased Property or any portion thereof; (b)
any abatement, reduction, suspension or deferment of the Rent or other sums
payable by Tenant hereunder; or (c) any rights of redemption. As to each Leased
Property, the obligations of Landlord and Tenant hereunder shall be separate and
the Rent and all other sums shall continue to be payable in all events unless
the obligations to pay the same shall be terminated pursuant to the express
provisions of this Lease or by termination of this Lease other than by reason of
an Event of Default.
ARTICLE III
IMPOSITIONS AND UTILITIES
3.01 Payment of Impositions. Subject to the adjustments set forth
herein, Tenant shall pay, in the manner set forth in Section 3.04, as Additional
Rent, to the Landlord an amount equal to the amount necessary to pay all
Impositions (as hereinafter defined) that may be levied or become a lien on any
Leased Property or any part thereof at any time (whether prior to or during the
Term), without regard to prior ownership of said Leased Property, before the
same becomes delinquent. Tenant's obligation to pay such Impositions shall be
deemed absolutely fixed upon the date such Impositions become a lien upon any
Leased Property or any part thereof. Tenant, at its expense, shall prepare and
file all tax returns and reports in respect of any Imposition as may be required
by governmental authorities, provided, however, that Tenant shall provide to
Landlord copies of all filings of such tax returns or reports in respect of any
real or personal property owned by Landlord. Tenant shall be entitled to any
refund due in respect of such Impositions from any taxing authority if no Event
of Default shall have occurred hereunder and be continuing. Any refunds in
respect of such Impositions retained by Landlord due to an
6
Event of Default shall be applied as provided in Section 9.08. Landlord and
Tenant shall, upon request of the other, provide such data as is maintained by
the party to whom the request is made with respect to a Leased Property as may
be necessary to prepare any required tax returns and reports. In the event
governmental authorities classify any property covered by this Lease as personal
property, Landlord and Tenant shall file all personal property tax returns in
such jurisdictions where it may legally so file with respect to their respective
owned personal property. Landlord, to the extent it possesses the same, and
Tenant, to the extent it possesses the same, will provide the other party, upon
request, with cost and depreciation records necessary for filing such returns or
reports for any property so classified as personal property. To the extent that
Landlord is legally required to file personal property tax returns, Tenant will
be provided with copies of assessment notices indicating a value in excess of
the reported value in sufficient time for Tenant to file a protest. Tenant may,
upon notice to Landlord, at Tenant's option and at Tenant's sole cost and
expense, protest, appeal, or institute such other proceedings as Tenant may deem
appropriate to effect a reduction of real estate or personal property
assessments and Landlord, at Tenant's expense as aforesaid, shall fully
cooperate with Tenant in such protest, appeal, or other action. Tenant shall
provide Landlord copies of all materials filed or presented in connection with
any such proceeding. Tenant shall promptly reimburse Landlord for all taxes paid
by Landlord, which were not paid with deposits received from Tenant, upon
receipt of xxxxxxxx accompanied by copies of a xxxx therefor and payments
thereof which identify the property with respect to which such payments are
made. Impositions imposed with respect to the tax-fiscal period during which the
Term commences and terminates as to each Leased Property shall be adjusted and
prorated between Landlord and Tenant on a per diem basis, with Tenant being
obligated to pay its pro rata share from and including the Commencement Date to
and including the expiration or termination date of the Term or Extension Term,
as the case may be, whether or not such Imposition is imposed before or after
such commencement or termination, and Tenant's obligation to pay its prorated
share thereof shall survive such termination. Tenant shall also pay to Landlord
a sum equal to the amount which Landlord may be caused to pay of any privilege
tax, sales tax, gross receipts tax, rent tax, occupancy tax or like tax
(excluding any tax based on net income), hereinafter levied, assessed, or
imposed by any federal, state, city, county or municipal or other local
governmental authority, or any subdivision thereof, upon or measured by rent or
other consideration required to be paid by Tenant under this Lease.
3.02 Definition of Impositions. "Impositions" means, collectively: (a)
taxes (including without limitation, all real estate and personal property ad
valorem (whether assessed as part of the real estate or separately assessed as
unsecured personal property), sales and use, business or occupation, single
business, gross receipts, transaction, privilege, rent or similar taxes, but not
including income or franchise or excise taxes payable with respect to Landlord's
receipt of Rent); (b) assessments, whether in the nature of a special assessment
or otherwise (including, without limitation, all assessments for public
improvements or benefits, whether or not commenced or completed prior to the
date hereof and whether or not to be completed within the Term or any Extension
Term, as the case may be); (c) ground rents, water, sewer or other rents and
charges, excises, tax levies, and fees (including, without limitation, license,
permit, inspection, authorization and similar fees); (d) to the extent they may
become a lien on a Leased
7
Property, all taxes imposed on Tenant's operations of such Leased Property
including without limitation, employee withholding taxes, income taxes and
intangible taxes; and (e) all other governmental charges, in each case whether
general or special, ordinary or extraordinary, or foreseen or unforseen, of
every character in respect of each Leased Property or any part thereof, the
Business conducted by Tenant thereon, and/or the Rent (including all interest
and penalties thereon due to any failure in payment by Tenant), which at any
time prior to, during or in respect of the Term or any Extension Term, as the
case may be, hereof may be assessed or imposed on or in respect of or be a lien
upon (i) Landlord or Landlord's interest in any Leased Property or any part
thereof; (ii) any Leased Property or any part thereof or any rent therefrom or
any estate, right, title or interest therein; or (iii) any occupancy, operation,
use or possession of, or sales from, or activity conducted on, or in connection
with any Leased Property or the leasing or use of any Leased Property or any
part thereof. Tenant shall not, however, be required to pay: (x) any tax based
on net income (whether denominated as a franchise or capital stock or other tax)
imposed on Landlord or (y) except as provided in Section 13.01, any tax imposed
with respect to the sale, exchange or other disposition by Landlord of a Leased
Property or the proceeds thereof; provided, however, that if any tax,
assessment, tax levy or charge which Tenant is obligated to pay pursuant to the
first sentence of this definition and which is in effect at any time during the
Term hereof is totally or partially repealed, and a tax, assessment, tax levy or
charge set forth in clause (x) or (y) immediately above is levied, assessed or
imposed expressly in lieu thereof Tenant shall then pay such tax, levy, or
charge set forth in said clause (x) or (y).
3.03 Utilities. Tenant shall contract for, in its own name, and will
pay, as Additional Rent all taxes, assessments, charges/deposits, and bills for
utilities, including without limitation charges for water, gas, oil, sanitary
and storm sewer, electricity, telephone service, trash collection, and all other
utilities which may be charged against the occupant of the Improvements during
the Term. Tenant shall at all times maintain that amount of heat necessary to
ensure against the freezing of water lines. Tenant hereby agrees to indemnify
and hold Landlord harmless from and against any liability or damages to the
utility systems of each Leased Property that may result from Tenant's failure to
maintain sufficient heat in the Improvements therefor.
3.04 Escrow of Impositions. Unless waived by written notice from
Landlord to Tenant, Tenant shall thereafter deposit with Landlord on the first
day of each month during the Term hereof and any Extension Term, as the case may
be, a sum equal to one-twelfth (1/12th) of the Impositions assessed against such
Leased Property which sums shall be used by Landlord toward payment of such
Impositions. If, at the end of any applicable tax year, any such funds held by
Landlord are insufficient to make full payment of taxes or other Impositions for
which such funds are held, Tenant, on demand, shall pay to Landlord any
additional funds necessary to pay and discharge in full the obligations of
Tenant pursuant to the provisions of this Section. If, however, at the end of
any applicable tax year, such funds held by Landlord are in excess of the total
payment required to satisfy taxes or other Impositions for which such funds are
held, Landlord shall apply such excess amounts to a tax and Imposition escrow
fund for the next tax year. With respect to each Leased Property, if any such
excess exists following the expiration or
8
earlier termination of this Lease, and subject to Section 8.08 below, Landlord
shall promptly refund such excess amounts to Tenant. The receipt by Landlord of
the payment of such Impositions by and from Tenant shall only be as an
accommodation to Tenant and the taxing authorities, and shall not be construed
as rent or income to Landlord, Landlord serving, if at all, only as a conduit
for delivery purposes.
3.05 Discontinuance of Utilities. Landlord will not be liable for
damages to person or property or for injury to, or interruption of, business for
any discontinuance of utilities at any Leased Property nor will such
discontinuance in any way be construed as an eviction of Tenant from such Leased
Property or cause an abatement of Rent as to such Leased Property or operate to
release Tenant from any of Tenant's obligations as to such Leased Property under
this Lease. Notwithstanding the forgoing, however, Landlord shall be liable for
damages to person or property or for injury to, or interruption of business, for
any discontinuance of utilities at any Leased Property, in the event and to the
extent, such damages or injury are caused by the wilful misconduct of the
Landlord.
3.06 Liens. Subject to Section 17.19 relating to contests, Tenant
shall not directly or indirectly create or allow to remain, and will promptly
discharge at its expense, any lien, encumbrance, attachment, title retention
agreement or claim upon any Leased Property or any attachment, levy, claim or
encumbrance in respect of any Rent provided under this Lease, not including,
however: (a) this Lease; (b) utility easements and road rights-of-way in the
customary form (i) provided the same do not adversely affect the intended use of
the Leased Properties (including the Improvements) and do not create a material
adverse effect on the value of the Leased Properties or (ii) which result solely
from the action or inaction of Landlord; (c) zoning and building laws or
ordinances, provided they do not prohibit the use of the Leased Properties for
the Business and so long as the Leased Properties are in compliance with same;
(d) such encumbrances as are subsequently consented to in writing by Landlord,
but excluding liens in respect of Impositions required to be paid under Section
3.01; (e) liens for Impositions so long as (i) the same are not yet payable or
are payable without the addition of any fine or penalty or (ii) such liens are
being contested as permitted under Section 16.18; and (f) other encumbrances,
easements, rights of way or liens (i) provided the same do not adversely affect
the intended use of the Leased Properties (including the Improvements) and do
not create a material adverse effect on the value of the Leased properties, or
(ii) which result solely from the action or inaction of Landlord.
ARTICLE IV
INSURANCE
4.01 Insurance. Tenant shall, at Tenant's expense, keep the
Improvements, Fixtures, and other components of each Leased Property insured
against the following risks:
(a) Loss or damage by fire with extended coverage (including
9
windstorm and subsidence), vandalism and malicious mischief,
sprinkler leakage and all other physical loss perils
commonly covered by "All Risk" insurance in an amount not
less than one hundred percent (100%) of the then full
replacement cost thereof (as hereinafter defined). Such
policy shall include an agreed amount endorsement if
available at a reasonable cost. Such policy shall also
include endorsements for contingent liability for operation
of building laws, demolition costs, and increased cost of
construction.
(b) Loss or damage by explosion of steam boilers, pressure
vessels, or similar apparatus, now or hereafter installed on
any Leased Property, in commercially reasonable amounts
acceptable to Landlord.
(c) Loss of rent under a rental value or Business interruption
insurance policy covering risk of loss during the first
twelve (12) months of reconstruction necessitated by the
occurrence of any hazards described in Sections 4.01(a) or
4.01(b), above, and which causes an abatement of Rent as
provided in Article X hereof, in an amount sufficient to
prevent Landlord or Tenant from becoming a co-insurer,
containing endorsements for extended period of indemnity and
premium adjustment, and written with an agreed amount
clause, if the insurance provided for in this clause (c) is
available.
(d) If the Land or any portion thereof related to a Leased
Property is located in whole or in part within a designated
flood plain area, loss or damage caused by flood in
commercially reasonable amounts acceptable to Landlord.
(e) Loss or damage commonly covered by blanket crime insurance
including employee dishonesty, loss of money orders or paper
currency, depositor's forgery, and loss of property accepted
by Tenant for safekeeping, in commercially reasonable
amounts acceptable to Landlord.
(f) Workers' compensation insurance as required by statute in
respect of any work or other operations on or about each
Leased Property.
(g) Comprehensive liability insurance as to each Leased Property
in amounts equal to the greater of (i) One Million Dollars
($1,000,000) for each occurrence and Two Million Dollars
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($2,000,000) in the aggregate, or (ii) the limits of
liability generally required under the franchise agreements
or other agreements pursuant to which Tenant operates the
Businesses conducted on or about each Leased Property.
(h) Commercial comprehensive catastrophic liability insurance
with limits of liability of not less than the greater of (i)
Five Million ($5,000,000) and (ii) the limits of liability
generally required under the franchise agreements or other
agreements pursuant to which Tenant operates the Businesses
conducted on or about each Leased Property.
(i) upon Landlord's request, earthquake insurance in an amount
not less than the full insurable value of each Leased
Property.
(j) During the period when any addition, alteration,
construction, installation or demolition is being made or
performed to any part of the Leased Property, contingent
liability, public liability, completed value, builder's risk
(non-reporting form) workers' compensation and other
insurance as is deemed prudent by Landlord.
4.02 Insurance Limits. Deductible provisions for the insurance
required under Section 4.01(a) shall not exceed Twenty-Five Thousand Dollars
($25,000) per location per occurrence and One Hundred Thousand Dollars
($100,000) aggregate per occurrence; under clause(d), Twenty-Five Thousand
Dollars ($25,000) per occurrence, except that if federal flood insurance is
available then such deductible shall not be greater than the lowest deductible
available with respect to such federal flood insurance; under clause (g),
Twenty-Five Thousand Dollars ($25,000) per occurrence; under clause (h), Twenty-
Five Thousand Dollars ($25,000) per occurrence; and under clause (j), Twenty-
Five Thousand Dollars ($25,000) per occurrence.
4.03 Insurance Requirements. The following provisions shall apply to
all insurance coverages required hereunder:
(a) The carriers of all policies shall have a Best's Rating of
"A-" or better and a Best's Financial Category of XII or
larger and shall be authorized to do insurance business in
the jurisdiction in which the Leased Property is located.
(b) Tenant shall be the "named insured" and Landlord and any
mortgagee of Landlord shall be an "additional named insured"
on each policy.
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(c) Tenant shall deliver to Landlord certificates or policies
showing the required coverages and endorsements. Each
policy or certificate of insurance shall provide that such
policy or certificate (i) may not be canceled, (ii) may not
lapse for failure to renew, and (iii) no material change or
reduction in coverage may be made, without at least thirty
(30) days' prior written notice to Landlord.
(d) The policies shall contain a severability of interest and/or
cross-liability endorsement, provide that the acts or
omissions of Tenant will not invalidate Landlord's coverage,
and provide that Landlord shall not be responsible for
payment of premiums.
(e) All loss adjustment shall require the written consent of
Landlord and Tenant, as their interests may appear.
(f) At least (30) thirty days prior to the expiration of each
policy, Tenant shall deliver to Landlord a certificate
showing renewal of such policy and payment of the annual
premium therefor.
Landlord shall have the right to review the insurance coverages
required hereunder with Tenant from time to time, to obtain the input of third
party professional insurance advisors (at Landlord's expense) with respect to
such insurance coverages, and to consult with Tenant in Tenant's annual review
and renewal of such insurance coverages. All insurance coverages hereunder
shall be in such form, substance and amounts as are customary or standard in
Tenant's industry, but at a minimum shall comply with the requirements set forth
herein.
4.04 Replacement Cost. The term "full replacement cost" means the
actual replacement cost of the Improvements from time to time including
increased cost of construction, with no reductions or deductions. Tenant shall,
not later than thirty (30) days after the anniversary of each policy of
insurance, increase the amount of the replacement cost endorsement for the
Improvements to the extent necessary to reflect increased costs of construction.
If Tenant makes any Permitted Alterations (as hereinafter defined) to any Leased
Property, Landlord may have such full replacement cost redetermined at any time
after such Permitted Alterations are made, regardless of when the full
replacement cost was last determined.
4.05 Blanket Policy. Tenant may carry the insurance required by this
Article under a blanket policy of insurance, provided that the coverage afforded
Tenant will not be reduced or diminished or otherwise be different from that
which would exist under a separate policy meeting all of the requirements of
this Lease and the Landlord approves the form of the policy.
4.06 No Separate Insurance. Tenant shall not take out separate
insurance concurrent in form or contributing in the event of loss with that
required in this Article, or
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increase the amounts of any then existing insurance by securing an additional
policy or additional policies, unless all parties having an insurable interest
in the subject matter of the insurance, including Landlord and any mortgagees,
are included therein as additional named insureds or loss payees, the loss is
payable under said insurance in the same manner as losses are payable under this
Lease, and such additional insurance is not prohibited by the existing policies
of insurance required pursuant to this Article. Tenant shall immediately notify
Landlord of the taking out of such separate insurance or the increasing of any
of the amounts of the existing insurance by securing an additional policy or
additional policies. The term "mortgages" as used in this Lease includes, but is
not limited to, Deeds of Trust and the term "mortgagees" includes, but is not
limited to, trustees and beneficiaries under a Deed of Trust.
4.07 Waiver of Subrogation. Each party hereto hereby waives any and
every claim which arises or may arise in its favor and against the other party
hereto during the Term or any Extension Term or renewal thereof, for any and all
loss of, or damage to, any of its property located within or upon, or
constituting a part of, any Leased Property, which loss or damage is covered by
valid and collectible insurance policies, to the extent that such loss or damage
is recoverable in full under such policies. Said mutual waiver shall be in
addition to, and not in limitation or derogation of, any other waiver or release
contained in this Lease with respect to any loss or damage to property of the
parties hereto. Inasmuch as the said waivers will preclude the assignment of any
aforesaid claim by way of subrogation (or otherwise) to an insurance company (or
any other person), each party hereto agrees immediately to give each insurance
company which has issued to it policies of insurance, written notice of the
terms of said mutual waivers, and to have such insurance policies properly
endorsed, if necessary, to prevent the invalidation of said insurance coverage
by reason of said waivers, so long as such endorsement is available at a
reasonable cost.
4.08 Mortgages. The following provisions shall apply if Landlord now
or hereafter places a mortgage on any Leased Property or any part thereof: (a)
Tenant shall obtain a standard form of mortgage clause insuring the interest of
the mortgagee; (b) Tenant shall deliver evidence of insurance to such mortgagee;
(c) loss adjustment shall require the consent of the mortgagee but such consent
shall not be unreasonably withheld and may not include any requirement that the
funds be paid to mortgagee in lieu of reconstruction; and (d) Tenant shall
obtain such other coverages and provide such other information and documents as
may be reasonably required by the mortgagee.
4.09 Other Insurance Requirements. Notwithstanding anything in this
Lease to the contrary and not by way of limitation, in addition to the types and
amounts of insurance required to be carried by Tenant herein, Tenant covenants
to insure and continue in effect such types and amounts of insurance as the
Tenant shall be required to carry pursuant to any contract, agreement,
instrument, statute, law, rule or regulation relating to the use of the Leased
Property and the operations of any Business or other activities thereon,
including noncancellable written notice to mortgagee.
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ARTICLE V
INDEMNITY; SUBSTANCES OF CONCERN
5.01 Tenant's Indemnification. Subject to Section 4.07, Tenant hereby
agrees to indemnify and hold harmless Landlord, its agents, and employees from
and against any and all demands, claims, causes of action, fines, penalties,
damages (including punitive and consequential damages), losses, liabilities
(including strict liability), judgments, costs and expenses (including, without
limitation, attorneys' fees, court costs, and the costs set forth in Section
9.06) (the "Claims") incurred in connection with or arising from: (a) the use,
condition, operation or occupancy of the Leased Properties; (b) any activity,
work, or thing done, or permitted or suffered by Tenant in, on or about the
Leased Properties; (c) any acts, omissions, or negligence of Tenant or any
person claiming under Tenant, or the contractors, agents, employees, invitees,
or visitors of Tenant or any such person; (d) any breach, violation, or
nonperformance by Tenant or any person claiming under Tenant or the employees,
agents, contractors, invitees, or visitors of Tenant or of any such person, of
any term, representation, warranty, covenant, or provision of this Lease or any
law, ordinance, or governmental requirement of any kind; (e) any injury or
damage to the person, property or Business of Tenant, its employees, agents,
contractors, invitees, visitors, or any other person entering upon any Leased
Property; (f) any accident, injury to or death of persons or loss or damage to
any item of property occurring on or about any Leased Property; (g) any
Environmental Law or any pollution or other threat to human health or the
environment at, arising out of or relating to any Leased Property as set forth
in Section 5.05, and (h) any brokers' or agents' fees and commissions. If any
action or proceeding is brought against Landlord, its employees, or agents by
reason of any such demand, claim, or cause of action, Tenant, upon notice from
Landlord, will defend the same at Tenant's expense with counsel reasonably
satisfactory to Landlord. In the event Landlord reasonably determines that its
interests and the interests of Tenant in any such action or proceeding are not
substantially the same and that Tenant's counsel cannot adequately represent the
interests of Landlord therein, Landlord shall have the right to hire separate
counsel in any such action or proceeding and the reasonable costs thereof shall
be paid for by Tenant. Tenant's indemnification obligations with respect to a
Claim shall survive the expiration or earlier termination of this Lease until
the later of (i) two (2) years from the date hereof, or (ii) the expiration of
the period ninety (90) days after the date on which Landlord has actual
knowledge of the existence of such Claim, provided, however, that Tenant's
indemnification obligations shall survive the expiration or earlier termination
of this Lease until ninety (90) days after the expiration of the applicable
statute of limitations for Claims incurred in connection with, arising out of,
or related to (i) Section 5.01(g) or (ii) the failure to pay, as provided for in
this Agreement, any Imposition.
5.02 Substances of Concern.
(a) For purposes of this Section 5:
(i) "Substances of Concern" means, without limitation,
chemicals, pollutants, contaminants, wastes, toxic
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substances, radioactive materials or genetically
modified organisms, which are, have been or become
regulated by any federal, state or local government
authority including, without limitation, (1) petroleum
or any fraction thereof, (2) asbestos, (3) any substance
or material defined as a "hazardous substance" pursuant
to (S) 101 of the Comprehensive Environmental Response
Compensation and Liability Act (42 U.S.C. (S) 9601), or
(4) any substance or material defined as a "hazardous
chemical" pursuant to the federal Hazard Communication
Standard (29 C.F.R. (S) 1910.1200).
(ii) "Environmental Laws" means all federal, state, local,
and foreign laws and regulations relating to pollution
or protection of human health or the environment
(including, without limitation, ambient air, surface
water, ground water, wetlands, land surface, subsurface
strata, and indoor and outdoor workplace), including,
without limitation, (1) laws and regulations relating to
emissions, discharges, releases, or threatened releases
of Substances of Concern, and (2) common law principles
of tort liability.
(b) Tenant shall not, either with or without negligence, injure,
overload, deface, damage or otherwise harm any Leased
Property or any part or component thereof; commit any
nuisance; permit the emission of any Substances of Concern;
allow the release or other escape of any biologically or
chemically active substances or materials or other Substances
of Concern so as to impregnate, impair or in any manner
affect, even temporarily, any element or part of any Leased
Property or neighboring property, or allow the storage or use
of such substances or materials in any manner not sanctioned
by law and by reasonable standards prevailing in the
automobile retail and related industries for the storage and
use of such substances or materials; nor shall Tenant permit
the occurrence of objectionable noise or odors; or make,
allow or suffer any waste whatsoever to any Leased Property.
Landlord may inspect each Leased Property from time to time,
and Tenant will cooperate with such inspections.
(c) Notwithstanding the foregoing, Tenant anticipates using,
storing and disposing of certain Substances of Concern in
connection with operation of its Business. Such Substances of
Concern include, but are not limited to, the following: motor
oil, waste motor oil and
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filters, transmission fluid, antifreeze, refrigerants, waste
paint and lacquer thinner, batteries, solvents, lubricants,
degreasing agents, gasoline and diesel fuels. Tenant shall
ascertain and comply fully with all applicable Environmental
Laws and environmental standards and requirements set by
federal, state or local laws, rules, regulations or
governmental directives related to the Leased Properties or
Tenant's use or occupancy of the Leased Property
("Environmental Standards"), including but not limited to any
laws or standards (a) regulating the use, storage, generation
or disposal of Substances of Concern, (b) regulating the
monitoring or use of any underground or aboveground storage
tanks at the Leased Properties, or (c) establishing any
permitting, notification or reporting requirements. As
promptly as practicable after the Commencement Date (but in
no event later than 120 days thereafter), Tenant shall
establish and implement a program of compliance with all
applicable Environmental Laws and Environmental Standards
("Environmental Compliance Program"). Tenant shall update
such Environmental Compliance Program every three (3) years
during the Term. Tenant shall submit its Environmental
Compliance Program and each update thereto to Landlord;
provided, however, such submittal shall not relieve Tenant of
its obligations pursuant to this Section 5. Tenant's
Environmental Compliance Program shall include a program for
monitoring Tenant's compliance with Environmental Laws and
Environmental Standards and a plan for correcting immediately
any incident of noncompliance. Tenant shall comply with its
Environmental Compliance Program.
(d) In the event of any noncompliance with any Environmental Laws
or Environmental Standards or any spill, release or discharge
of Substances of Concern in a reportable quantity under
federal, state or local law, Tenant shall:
(i) give Landlord immediate notice of the incident by
telephone or facsimile, providing as much detail as
possible. Such notice shall be provided to Landlord's
National Dealership Real Estate Manager or to such other
person as Landlord shall designate in accordance with
Section 16.01 below;
(ii) as soon as possible, but no later than seventy-two (72)
hours, after discovery of an incident of noncompliance,
submit a written report to Landlord, identifying the
source
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or case of the noncompliance or spill, release or
discharge (including the names and quantities of any
Substances of Concern involved) and the method or action
required to correct the problem; and
(iii) cooperate with Landlord or its designated agents or
contractors with respect to the investigation and
correction of such problem.
Tenant shall also be solely responsible for providing any notice to
any federal, state or local governmental authority required by applicable laws
and regulations as a result of such incident.
5.03 Audits. Landlord shall have the right to conduct, at its
expense, periodic audits of Tenant's compliance with the Environmental
Compliance Program and management of Substances of Concern at the Leased
Properties and/or periodic tests of air, soil, surface water or groundwater at
or near the Leased Properties. Landlord shall not be obligated to provide
Tenant with the results of any audit or tests unless such results are the basis
for a claim by Landlord that Tenant has breached its obligations under this
Lease or a demand by Landlord that Tenant modify its Environmental Compliance
Program or operations or remediate or remove a spill, release or discharge of
Substances of Concern in accordance with Section 5.06 below. Tenant agrees
promptly to modify its Environmental Compliance Program or the conduct of its
operations in accordance with Landlord's reasonable recommendations directed at
improvement of Tenant's handling, use and disposal of Substances of Concern in,
on or from any Leased Property. If, as a result of an environmental audit
performed by Landlord with respect to any Leased Property, Landlord reasonably
determines in its judgment that alterations or improvements of equipment or
buildings located on the Leased Property are necessary, Tenant shall perform
such alterations or improvements as are reasonable under the circumstances and
pay all costs and expenses relating thereto. If Tenant shall fail to pay any
such costs or expenses, Tenant shall deposit with Landlord the full amount
necessary to pay such costs in full within ten (10) days of Landlord's demand.
Nothing contained herein shall be construed to obligate or require Landlord to
perform any audits, tests, inquiry or investigation. Should Landlord elect or
be required to disclose to Tenant the results of any audit or tests, Landlord
shall not be liable in any way for the truth or accuracy of such information.
5.04 Landlord's Option Re: Compliance. If Tenant, after notice
from Landlord, fails to comply with or perform any of its obligations pursuant
to this Section 5, including, but not limited to, obligations to clean up
spills, releases or discharges, Landlord may, but shall not be obligated to,
perform such obligations and Tenant shall pay Landlord within ten (10) days of
demand Landlord's costs therefor, including any overhead and administrative
costs.
5.05 Environmental Indemnification. Tenant shall indemnify and
hold harmless Landlord from and against all demands, claims, causes of action,
fines, penalties,
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damages (including punitive and consequential damages), losses, liabilities
(including strict liability), judgments, and expenses (including, without
limitation, attorneys' fees, court costs, and the costs set forth in Section
9.06) imposed upon or asserted against Tenant, Landlord or any Leased Property
on account of any Environmental Law (irrespective of whether there has occurred
any violation of any Environmental Law) relating to any Leased Property,
including (a) response costs and costs of removal and remedial action incurred
by the United States Government or any state or local governmental unit to any
other person or entity, or damages from injury to or destruction or loss of
natural resources, including the reasonable costs of assessing such injury,
destruction or loss, incurred pursuant to any Environmental Law, (b) costs and
expenses of abatement, investigation, removal, remediation, correction or
cleanup, fines, damages, response costs or penalties which arise from the
provisions of any Environmental Law, (c) liability for personal injury or
property damage arising under any statutory or common-law tort theory, including
damages assessed for the maintenance of a public or private nuisance or for
carrying on of a dangerous activity, (d) liability by reason of a breach of an
environmental representation or warranty by Tenant, and (e) failure of Tenant to
complete in a timely manner alterations or improvements of equipment or
buildings located on the Leased Property deemed necessary or advisable by
Landlord pursuant to Section 5.03 in a manner acceptable to Landlord.
5.06 Tenant's Cleanup Obligation. If any spill, release or
discharge of Substances of Concern occurs on, at or from the Leased Properties
during the Term, Tenant shall promptly take all actions, at its sole expense, as
are necessary to remove or remediate such spill, release or discharge and to
return the Leased Property to the condition existing prior to the introduction
of any such Substances of Concern to the Leased Property, provided that
Landlord's approval of such action shall first be obtained, which approval shall
not be unreasonably withheld so long as such actions would not potentially have
any material adverse effect on the Leased Property.
5.07 Existing Environmental Conditions. Tenant acknowledges that
it has had the opportunity to review the Environmental Reports attached hereto
as Exhibit 5.07. Tenant hereby represents that it has reviewed and is aware of
the matters disclosed in the Environmental Reports.
As a material consideration for Landlord's willingness to enter into
this Lease, Tenant, for itself and its Affiliates, and each of their
shareholders, directors, officers, employees, agents, contractors,
representatives, insurers, successors and assigns hereby waives and releases
Landlord and its Affiliates and each of their shareholders, directors, officers,
employees, representatives, agents, contractors, representatives, insurers,
successors and assigns from any and all claims, demands, liabilities, costs,
expenses, causes of action and rights of action whatsoever, past, present or
future, known or unknown, suspected or unsuspected, which arise out of or relate
in any way to the violation of Environmental Laws or the use, storage,
treatment, disposal, presence, spill, release, or discharge of Substances of
Concern at, on or from the Leased Properties before the Commencement Date
(collectively, the "Released Claims").
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In the event that Landlord is ordered by a governmental agency, or
determines that it is in its best interest, to remedy any violation of
Environmental Laws or to remove or remediate any Substances of Concern present
on, under or about the Leased Properties on the Commencement Date, or spilled,
released or discharged on, at or from the Leased Properties before the
Commencement Date, Tenant shall immediately upon notice from Landlord take all
actions, at Tenant's sole expense, to promptly complete such removal or
remediation.
5.08 Survival of Tenant's Obligations. Tenant's obligations
under this Section 5 shall survive the expiration or earlier termination of this
Lease. During any period of time employed by Tenant after the termination of
this Lease to complete the removal from the Leased Property of any Substances of
Concern, if the premises are not rentable for uses contemplated under this
Lease, Tenant shall continue to pay the full amount of Rent due under this
Lease, which Rent shall be prorated daily for the final month of such period of
time.
ARTICLE VI
USE AND ACCEPTANCE OF PREMISES
6.01 Use of Leased Properties. For so long as this Lease is in
effect (including following any sublease or assignment thereof), Tenant shall
use and occupy each Leased Property exclusively for the purpose of conducting
the Business or for any other legal purpose for which such Leased Property is
being used as of the Commencement Date, and for no other purpose without the
prior written consent of Landlord. Tenant shall obtain and maintain all
approvals, licenses, and consents needed to use and operate the Leased
Properties for such purposes. Tenant shall promptly deliver to Landlord complete
copies of surveys, examinations, certification and licensure inspections,
compliance certificates, and other similar reports issued to Tenant by any
governmental agency.
6.02 Acceptance of Leased Properties. Except as otherwise
specifically provided in this Lease, Tenant acknowledges (i) Tenant and its
agents have had an opportunity to inspect each Leased Property; (ii) Tenant has
found each Leased Property fit for Tenant's use; (iii) delivery of each Leased
Property to Tenant is in an "as-is" condition; (iv) Landlord is not obligated to
make any improvements or repairs to any Leased Property; and (v) the roof,
walls, foundation, heating, ventilating, air conditioning, telephone, sewer,
electrical, mechanical, utility, plumbing, and other portions of each Leased
Property are in good working order. Tenant waives any claim or action against
Landlord with respect to the condition of any Leased Property. LANDLORD MAKES
NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF THE LEASED
PROPERTIES OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR USE, DESIGN OR
CONDITION OR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, AS TO QUALITY OR THE
MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING AGREED THAT ALL SUCH
RISKS ARE TO BE BORNE BY TENANT.
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6.03 Conditions of Use and Occupancy. Tenant agrees that during
the Term it shall use and keep each Leased Property in a careful, safe and
proper manner; not commit or suffer waste thereon; not use or occupy any Leased
Property for any unlawful purposes; not use or occupy any Leased Property or
permit the same to be used or occupied, for any purpose or business deemed extra
hazardous on account of fire or otherwise; keep each Leased Property in such
repair and condition as may be required by the local board of health, or other
city, state or federal authorities, free of all cost to Landlord; not permit any
acts to be done which will cause the cancellation, invalidation, or suspension
of any insurance policy; and permit Landlord and its agents to enter upon each
Leased Property at all reasonable times after notice to Tenant to examine the
condition thereof. In addition, at any time and from time to time upon not less
than fifteen (15) days prior written notice, Tenant shall permit Landlord and
any mortgagee or lender and their authorized representatives, to inspect the
Leased Properties during normal Business hours, provided that such inspections
shall not unreasonably interfere with Business of Tenant.
6.04 Financial Statements and Other Information. Tenant shall
provide Landlord and any mortgagee or lender regularly (or more often as may be
reasonably requested by Landlord in writing), the following financial
information: (a) as to each Leased Property within thirty (30) days after each
fiscal quarter during the Term or any Extension Term, as the case may be,
(except the fourth quarter), Tenant-prepared financial statements prepared in
accordance with generally accepted accounting principles ("GAAP") consistently
applied; and (b) as to each Leased Property and itself, Tenant shall use its
best efforts to provide Landlord within ninety (90) days after the end of each
fiscal year of Tenant during the Term or any Extension Term, as the case may be,
and in no event later than one hundred and twenty (120) days after the end of
each fiscal year of Tenant during the Term or any Extension Term, as the case
may be, financial statements, audited, reviewed or compiled by a certified
public accountant (the "Annual Financial Statements"). Tenant shall also
deliver to Landlord such additional financial information as Landlord may
reasonably request, provided the same is of a type normally maintained by Tenant
or can be obtained without undue cost or burden on Tenant's personnel and does
not constitute information which Tenant reasonably determines to be proprietary
or confidential. Additionally, upon Landlord's request, Tenant shall provide
Landlord with copies of Tenant's annual capital expenditure budgets for each
Leased Property and any reports generated by Tenant regarding maintenance and
repairs of each Leased Property.
ARTICLE VII
REPAIRS, COMPLIANCE WITH LAWS, AND MECHANICS' LIENS
7.01 Maintenance. Tenant shall maintain each Leased Property in
good order, repair and appearance, and repair each Leased Property, including
without limitation, all interior and exterior, structural and nonstructural
repairs and replacements to the roof, foundations, exterior walls, building
systems, HVAC systems, parking areas, sidewalks, water, sewer and gas
connections, pipes, and mains. Tenant shall pay as Additional Rent the full
cost of such
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maintenance, repairs, and replacements. Tenant shall maintain all drives,
sidewalks, parking areas, and lawns on or about each Leased Property in a clean
and orderly condition, free of accumulations of dirt, rubbish, snow and ice.
Tenant shall permit Landlord to inspect each Leased Property at all reasonable
times, and shall implement all reasonable suggestions of Landlord as to the
maintenance and repair of each Leased Property.
7.02 Compliance with Laws. Tenant shall comply with all laws,
ordinances, orders, rules, regulations, and other governmental requirements
relating to the use, condition, or occupancy of each Leased Property, whether
now or hereafter enacted and in force including without limitation: (a)
licensure requirements for operation of the Business; (b) requirements of any
board of casualty insurance underwriters or insurance service office for any
other similar body having jurisdiction over any Leased Property; (c) all zoning
and building codes; and (d) Environmental Laws. At Landlord's request, from
time to time, Tenant shall deliver to Landlord copies of certificates or permits
evidencing compliance with such laws, including without limitation, copies of
any applicable licenses, certificates of occupancy and building permits. Tenant
shall provide Landlord with copies of any notice from any governmental authority
alleging any non-compliance by Tenant or any Leased Property with any of the
foregoing requirements and such evidence as Landlord may reasonably require of
Tenant's remediation thereof. Tenant hereby agrees to defend, indemnify and
hold Landlord, its agents, and employees from and against any and all demands,
claims, causes of action, fines, penalties, damages (including punitive and
consequential damages), losses, liabilities (including strict liability),
judgments, costs and expenses (including, without limitation, attorneys' fees,
court costs, and the costs set forth in Section 9.06) resulting from any failure
by Tenant to comply with any laws, ordinances, rules, regulations, and other
governmental requirements.
7.03 Required Alterations. Tenant shall, at Tenant's sole cost
and expense, make any additions, changes, improvements or alterations to each
Leased Property, including structural alterations, which may be required by any
governmental authorities, including those required to continue to satisfy any
licensure requirements related to the operation of the Business, whether such
changes are required by Tenant's use, changes in the law, ordinances, or
governmental regulations, defects existing as of the date of this Lease, or any
other cause whatsoever. Tenant shall provide thirty (30) days prior written
notice to Landlord of any changes to a Leased Property pursuant to this Section
7.03 which involve changes to the structural integrity thereof or materially
affect the operational capabilities thereof. All such additions, changes,
improvements or alterations shall be deemed to be a Tenant Improvement and shall
comply with all laws relating to such alterations and with the provisions of
Section 8.01.
7.04 Mechanics' Liens. Tenant shall have no authority to permit
or create a lien against Landlord's interest in any Leased Property, and Tenant
shall post notices or file such documents as may be required to protect
Landlord's interest in each Leased Property against liens. Tenant hereby agrees
to defend, indemnify, and hold Landlord harmless from and against any mechanics'
liens against any Leased Property by reason of work, labor services or materials
21
supplied or claimed to have been supplied on or to such Leased Property. Tenant
shall immediately remove, bond-off, or otherwise obtain the release of any
mechanics' lien filed against any Leased Property. Tenant shall pay all expenses
in connection therewith, including without limitation, damages, interest, court
costs and reasonable attorneys' fees.
7.05 Replacements of Fixtures. Tenant shall not remove Fixtures
from any Leased Property except to replace such Fixtures with other items used
for similar or analogous purposes, which replacement items are of equal or
greater quality and value. Items being replaced by Tenant may be removed and
shall become the property of Tenant and items replacing the same shall be and
remain the property of Landlord. Tenant shall execute, upon written request
from Landlord, any and all documents necessary to evidence Landlord's ownership
of the Fixtures and replacements therefor. Tenant may not finance replacements
by security agreement or equipment lease unless: (a) Landlord has consented to
the terms and conditions of the equipment lease or security agreement; (b) the
equipment lessor or lender has entered into a non-disturbance agreement with
Landlord upon terms and conditions acceptable to Landlord, including without
limitation (i) Landlord shall have the right (but not the obligation) to assume
such security agreement or equipment lease upon the occurrence of an Event of
Default by Tenant hereunder; (ii) the equipment lessor or lender shall promptly
notify Landlord of any default by Tenant under the equipment lease or security
agreement and give Landlord a reasonable opportunity to cure such default; and
(iii) Landlord shall have the right to assign its rights under the equipment
lease, security agreement, or non-disturbance agreement; (c) the equipment
lessor or lender shall subordinate its security interest to the security
interest of any of Landlord's lessors, mortgagors or lenders, whether now
created or hereafter existing, and (d) Tenant shall, within ten (10) days after
receipt of an invoice from Landlord, reimburse Landlord for all costs and
expenses incurred in reviewing and approving the equipment lease, security
agreement, and non-disturbance agreement, including without limitation,
reasonable attorneys' fees and costs.
7.06 Encroachments; Restrictions. If any of the Improvements
shall, at any time, encroach upon any property, street or right-of-way adjacent
to a Leased Property, or shall violate the agreements or conditions contained in
any restrictive covenant or other agreement affecting a Leased Property, other
than one which is created or consented to by Landlord without Tenant's consent,
or shall impair the rights of others under an easement or right-of-way to which
a Leased Property is subject, other than one which is created or consented to by
Landlord without Tenant's consent, then promptly upon the request of Landlord or
at the request of any person affected by any such encroachment, violation or
impairment, Tenant shall, at its expense, subject to its right to contest the
existence of any encroachment, violation or impairment and in such case, in the
event of an adverse final determination, either (a) obtain valid and effective
waivers or settlements of all claims, liabilities and damages resulting from
each such encroachment, violation or impairment, whether the same shall affect
Landlord or Tenant or (b) make such changes in the Improvements and take such
other actions as shall be necessary to remove such encroachment and to end such
violation or impairment, including, if necessary, the alteration of
improvements. Any such alteration shall be made in conformity with the
requirements of Article VIII.
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ARTICLE VIII
ALTERATIONS AND SIGNS; TENANT'S PROPERTY;
CAPITAL ADDITIONS TO THE LEASED PROPERTIES
8.01 Tenant's Right to Construct. As to each Leased Property, during
the Term of this Lease or any Extension Term, as the case may be, so long as no
Event of Default shall have occurred and be continuing as to such Leased
Property, Tenant may make Capital Additions (as defined herein), or other
alterations, additions, changes and/or improvements to such Leased Property as
deemed necessary or useful to operate such Leased Property for Tenant's Business
(individually, a "Tenant Improvement," or collectively, the "Tenant
Improvements"). "Capital Additions" shall mean the construction of one or more
new buildings or one or more additional structures annexed to any portion of any
of the Improvements on a Leased Property, which are constructed on any parcel
or portion of the Land comprising a Leased Property, including the construction
of a new floor, or the repair, replacement, restoration, remodeling or
rebuilding of the Improvements or any portion thereof on a Leased Property which
are not normal, ordinary or recurring to maintain such Leased Property. Except
as otherwise agreed to by Landlord herein or otherwise in writing, any such
Tenant Improvement or Capital Addition shall be made at Tenant's sole expense
and shall become the property of Landlord upon termination of this Lease.
Unless made on an emergency basis to prevent injury to person or property, as to
each Leased Property, Tenant must obtain Landlord's prior written approval, such
approval not to be unreasonably withheld or delayed, for any Capital Addition or
for any Tenant Improvement which is not a Capital Addition and which has a cost
of more than One Hundred Thousand Dollars ($100,000) or a cost which, when
aggregated with the costs of all such Tenant Improvements on such Leased
Property in a given Lease Year, would cause the total costs of all such Tenant
Improvements on such Leased Property to exceed Two Hundred Fifty Thousand
Dollars ($250,000). Additionally, in connection with any Tenant Improvement,
including any Capital Addition, Tenant shall provide Landlord with copies of any
plans and specification therefor, Tenant's budget relating thereto, any required
governmental permits or approvals, any construction contracts or agreements
relating thereto, and any other information relating to such Tenant Improvement
as Landlord shall reasonably request.
8.02 Scope of Right. Subject to Section 8.01 herein and Section 7.03
concerning required alterations, at Tenant's cost and expense, Tenant shall have
the right to:
(a) seek any governmental approvals, including building permits,
licenses, conditional use permits and any certificates of
need that Tenant requires to construct any Tenant
Improvement;
(b) erect upon each Leased Property such Tenant Improvements as
Tenant deems desirable;
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(c) make additions, alterations, changes and improvements in any
Tenant Improvement so erected; and
(d) engage in any other lawful activities that Tenant determines
are necessary or desirable for the development of each
Leased Property in accordance with the Tenant's Business;
provided, however, Tenant shall not make any Tenant Improvement which would, in
Landlord's reasonable judgment, impair the value of the Leased Property or the
Tenant's Business without Landlord's prior written consent and provided, further
that Tenant shall not be permitted to create a mortgage, lien or any other
encumbrance on any Leased Property without Landlord's prior written consent.
8.03 Cooperation of Landlord. Landlord shall cooperate with Tenant and
take such actions, including the execution and delivery to Tenant of any
applications or other documents, reasonably requested by Tenant in order to
obtain any governmental permits, licenses or approvals sought by Tenant to
construct any Tenant Improvement within fifteen (15) business days following the
later of: (a) the date Landlord receives Tenant's request or (b) the date of
delivery of any such application or document to Landlord; provided, the taking
of such action by Landlord, including the execution of said applications or
documents, shall be without cost to Landlord (or if there is a cost to Landlord,
such cost shall be reimbursed by Tenant), shall not cause Landlord to be in
violation of any law, ordinance or regulation, and shall not be deemed a waiver
by Landlord of any of its rights or of any of Tenant's obligations, including
but not limited to indemnification.
8.04 Commencement of Construction. Tenant agrees that:
(a) Tenant shall diligently seek all governmental approvals
relating to the construction of any Tenant Improvement;
(b) Once Tenant begins the construction of any Tenant
Improvement, Tenant shall diligently oversee any such
construction to completion in accordance with applicable
insurance requirements and the laws, rules and regulations
of all governmental bodies or agencies having jurisdiction
over the subject Leased Property;
(c) Landlord shall have the right at any time and from time to
time to post and maintain upon each Leased Property such
notices as may be necessary to protect Landlord's interest
from mechanics' liens, materialmen's liens or liens of a
similar nature;
(d) Tenant shall not suffer or permit any mechanics' liens or
any other claims or demands arising from the work of
construction of any
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Tenant Improvement to be enforced against any Leased
Property or any part thereof, and Tenant agrees to hold
Landlord, its agents and employees and said Leased Property
free and harmless from all demands, claims, causes of
action, fines, penalties, damages (including punitive and
consequential damages), losses, liabilities (including
strict liability), judgments, costs and expenses
(including, without limitation, attorneys' fees, court
costs, and the costs set forth in Section 9.06) incurred in
connection with or arising therefrom;
(e) All work shall be performed in a satisfactory and
workmanlike manner consistent with standards in the
industry; and
(f) Subject to Section 8.08 in the case of Capital Additions,
Tenant shall not secure any construction or other financing
for the Tenant Improvements which is secured by a portion
of any Leased Property without Landlord's prior written
consent, and any such financing (i) shall not exceed the
cost of the Tenant Improvements, (ii) shall be subordinate
to any mortgage or encumbrance now existing or hereinafter
created with respect to such Leased Property, and (iii)
shall be limited solely to Tenant's interest in the subject
Leased Property.
8.05 Rights in Tenant Improvements. Notwithstanding anything to the
contrary in this Lease, all Tenant Improvements existing on the Leased Property
or constructed upon each Leased Property pursuant to Section 8.01, any and all
subsequent additions thereto and alterations and replacements thereof shall be
the sole and absolute property of Tenant during the Term and any Extension Term,
as the case may be, of this Lease (in respect of such Leased Property). Upon the
expiration or early termination of this Lease in respect of a Leased Property,
all such Tenant Improvements located thereon shall become the property of
Landlord. Without limiting the generality of the foregoing, prior to the
expiration or early termination of this Lease in respect of a Leased Property,
Tenant shall be entitled to all federal and state income tax benefits associated
with all Tenant Improvements located on such Leased Property.
8.06 Personal Property. Tenant shall install, place, and use on each
Leased Property such fixtures, furniture, equipment, inventory and other
personal property in addition to the Fixtures as may be required or as Tenant
may, from time to time, deem necessary or useful to operate such Leased Property
in the operation of the Business.
8.07 Requirements for the Tenant's Personal Property. Tenant shall
comply with all of the following requirements in connection with the Tenant's
Personal Property:
(a) RESERVED.
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(b) The Tenant's Personal Property shall be installed in a good
and workmanlike manner, in compliance with all governmental
laws, ordinances, rules, and regulations and all insurance
requirements, and be installed free and clear of any
mechanics' liens.
(c) Tenant shall, at Tenant's sole cost and expense, maintain,
repair, and replace the Tenant's Personal Property.
(d) Tenant shall, at Tenant's sole cost and expense, keep the
Tenant's Personal Property insured against loss or damage by
fire, vandalism and malicious mischief, sprinkler leakage,
and other physical loss perils commonly covered by fire and
extended coverage, boiler and machinery, and difference in
conditions insurance (which insurance shall meet the
requirements of Section 4.03 hereof) in an amount not less
than the full replacement cost thereof or such other amount
as appears on a schedule submitted by Tenant to Landlord,
which schedule shall be subject to Landlord's approval, and
Tenant shall use the proceeds from any such policy for the
repair and replacement of such items of Tenant's Personal
Property; provided, however, that if Landlord fails to
object to the schedule so submitted by Tenant within five
(5) business days of Landlord's receipt of such schedule,
Landlord's approval of such schedule shall be deemed given.
(e) Tenant shall pay all Impositions and other taxes applicable
to Tenant's Personal Property.
(f) If Tenant's Personal Property is damaged or destroyed by
fire or otherwise, Tenant shall promptly repair or replace
Tenant's Personal Property unless Tenant is entitled to and
elects to terminate the Lease pursuant to Section 10.05.
(g) As to each Leased Property, unless an Event of Default (or
any event which, with the giving of notice or lapse of time,
or both, would constitute an Event of Default) has occurred
and remains uncured beyond any applicable grace period,
Tenant may remove Tenant's Personal Property from such
Leased Property from time to time provided that: (i) the
items removed are not required or necessary to operate the
Business on such Leased Property (unless such items are
being replaced by Tenant) and (ii) Tenant promptly repairs
any damage to such Leased Property resulting from the
removal of Tenant's Personal Property.
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(h) As to each Leased Property, Tenant shall remove all of
Tenant's Personal Property upon the termination or
expiration of the Lease and shall promptly repair any damage
to such Leased Property resulting from the removal thereof
to the reasonable satisfaction of Landlord; provided,
however, if Tenant fails to remove Tenant's Personal
Property from such Leased Property within thirty (30) days
after the termination or expiration of this Lease with
respect thereto, then Tenant shall be deemed to have
abandoned such items of Tenant's Personal Property, all of
which shall become the property of Landlord, and Landlord
may remove, store and dispose of such property and Tenant
shall have no claim or right against Landlord for such
property or the value thereof regardless of the disposition
thereof by Landlord. Tenant shall pay Landlord, upon
demand, all expenses incurred by Landlord in removing,
storing, and disposing of such items of Tenant's Personal
Property and repairing any damage caused by such removal.
Tenant's obligations hereunder shall survive the termination
or expiration of this Lease as to such Leased Property.
(i) Tenant shall perform its obligations under any equipment
lease or security agreement for Tenant's Personal Property.
8.08 Financings of Capital Additions to a Leased Property. Landlord
may, but shall be under no obligation to, provide or arrange construction,
permanent or other financing for any Capital Addition proposed to be made to a
Leased Property by Tenant. Any financing so provided by Landlord shall be made
in accordance with, and subject to, a written Addendum to this Lease.
ARTICLE IX
DEFAULTS AND REMEDIES
9.01 Events of Default. The occurrence of any one or more of the
following shall be an event of default ("Event of Default") hereunder:
(a) Tenant fails to pay in full any installment of Rent, or any
other monetary obligation payable by Tenant to Landlord
hereunder, within ten (10) days after the due date thereof
and after written notice thereof and an opportunity to cure
within a ten (10) day period after such notice is given to
Tenant by Landlord. In the event of Tenant's failure to
make timely payment of such obligations two (2) times during
any twelve (12) month period, each subsequent such failure
within the twelve (12) months
27
immediately following such second failure shall immediately
constitute an Event of Default, and Landlord shall not be
required to provide notice thereof, nor shall Tenant have
any further opportunity to cure such failure;
(b) Tenant fails to observe and perform any covenant (other than
the covenant in respect of insurance set forth in Article
IV), condition or agreement hereunder to be performed by
Tenant (except those described in Section 9.01(a) of this
Lease) and such failure continues for a period of twenty
(20) days after written notice thereof is given to Tenant by
Landlord; or if, by reason of the nature of such default,
the same cannot with due diligence be remedied within said
twenty (20) days, such failure will not be deemed to
continue if Tenant proceeds promptly and with due diligence
to remedy the failure and diligently completes the remedy
thereof; provided, however, said cure period will not extend
beyond forty (40) days if the facts or circumstances giving
rise to the default are creating a further harm to Landlord
or the subject Leased Property and Landlord makes a good
faith determination that Tenant is not undertaking remedial
steps that Landlord would cause to be taken if this Lease
were then to terminate;
(c) If Tenant: (i) admits in writing its inability to pay its
debts generally as they become due; (ii) files a petition in
bankruptcy or a petition to take advantage of any insolvency
act; (iii) makes an assignment for the benefit of its
creditors; (iv) is unable to pay its debts as they mature;
(v) consents to the appointment of a receiver of itself or
of the whole or any substantial part of its property; or
(vi) files a petition or answer seeking reorganization or
arrangement under the federal bankruptcy laws or any other
applicable law or statute of the United States of America or
any state thereof;
(d) If Tenant, on insolvency proceedings or on a petition in
bankruptcy filed against it, is adjudicated as bankrupt or a
court of competent jurisdiction enters an order or decree
appointing, without the consent of Tenant, a receiver of
Tenant of the whole or substantially all of its property, or
approving a petition filed against it seeking reorganization
or arrangement of Tenant under the federal bankruptcy laws
or any other applicable law or statute of the United States
of America or any state thereof, and such judgment, order or
decree is not vacated, dismissed or set aside
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within sixty (60) days from the date of the entry thereof;
(e) If the estate or interest of Tenant in a Leased Property or
any part thereof is levied upon or attached in any
proceeding and the same is not vacated or discharged within
fifteen (15) days after commencement thereof (unless Tenant
is contesting such lien or attachment in accordance with
this Lease) or if such estate or interest of Tenant is
assigned, conveyed or involuntarily transferred in violation
of this Lease;
(f) Any representation, warranty or covenant made by Tenant on
behalf of itself or an Affiliate in this Lease or in any
certificate, demand or request made pursuant hereto proves
to be incorrect, in any material respect, as of the date of
issuance or making thereof;
(g) Conviction of Tenant or an Affiliate of a crime or offense
constituting a felony in the jurisdiction in which committed
or under federal law which conviction results in the
termination of the franchise.
(h) Termination or relinquishment of the franchise or license
pursuant to which Tenant or an Affiliate conducts business
on or from any Leased Property, provided that such event
shall not constitute an Event of Default if (i) no other
Event of Default enumerated in this Section 9.01 shall occur
and be continuing, and (ii) at a date no later than twenty-
four (24) months following such date of termination or
relinquishment, Tenant or an Affiliate has entered into
written new or amended franchises or licenses for operation
of motor vehicle retail or motor vehicle related businesses
at such Leased Property satisfactory to Landlord in its
discretion applying commercially reasonable standards;
(i) Default under any franchise or license pursuant to which
Tenant or an Affiliate conducts business at a Leased
Property, if in the Landlord's judgment such default in
light of commercially reasonable standards and industry
practice would have a material adverse effect (as hereafter
defined) on the Leased Property;
(j) A final, non-appealable judgment or judgments for the
payment of money not fully covered (excluding deductibles)
by insurance is rendered against Tenant and the same remains
undischarged, unvacated, unbonded, unappealed or unstayed
for a period of thirty (30) consecutive days;
29
(k) Tenant shall fail to observe the covenant in respect to
insurance under Article IV provided Landlord shall have
provided notice of such failure to Tenant and Tenant shall
have failed to cure such failure within three (3) business
days of such notice; or
(l) Except after the effective date of a permitted assignment
meeting the requirements of Article XIII, if Tenant is
liquidated or dissolved, or begins proceedings toward
liquidation or dissolution, or in any manner permits the sale
or divestiture of substantially all of its assets.
9.02 Remedies. To the extent an Event of Default is applicable only to
a specific Leased Property or specific Leased Properties (in accordance with
Section 9.01 above), the remedies set forth herein shall be exercisable solely
with respect to such Leased Property or Leased Properties, and shall not be
exercisable with respect to any other Leased Property. To the extent an Event of
Default constitutes an Event of Default as to all of the Leased Properties (in
accordance with Section 9.01 above), the remedies set forth herein shall be
exercisable with respect to all of the Leased Properties. Subject to the
foregoing provisions, Landlord may exercise any one or more of the following
remedies upon the occurrence of an Event of Default:
(a) Landlord may terminate this Lease, exclude Tenant from
possession of the subject Leased Property and use reasonable
efforts to lease the subject Leased Property to others. If
this Lease is terminated pursuant to the provisions of this
subparagraph (a) with respect to one or more, but less than
all, of the Leased Properties identified on Schedule A
hereto, Tenant will remain liable to Landlord for the Rent
for all of the Leased Properties identified on Schedule A
and other sums then due and for the balance of the Term as
if the Lease had not been terminated with respect to the
subject Leased Property, less the net proceeds, if any, of
any re-letting of the subject Leased Property by Landlord
subsequent to such termination, after deducting all
Landlord's expenses in connection with such re-letting,
including without limitation, the expenses set forth in
Section 9.02(b)(ii) below. Notwithstanding the termination
of this Lease with respect to a subject Leased Property,
Tenant shall pay to Landlord all amounts due as Rent, and
such other amounts then due, under this Lease on the days
that such Rent and such other amounts become due and payable
as required by this Lease.
(b) Without demand or notice, Landlord may re-enter and take
possession of the subject Leased Property or any part
thereof; and repossess such Leased Property as of Landlord's
former estate; and
30
expel Tenant and those claiming through or under Tenant from
such Leased Property; and, remove the effects of both or
either, without being deemed guilty of any manner of
trespass and without prejudice to any remedies for arrears
of Rent or preceding breach of covenants or conditions. If
Landlord elects to re-enter, as provided in this paragraph
(b) or if Landlord takes possession of such Leased Property
pursuant to legal proceedings or pursuant to any notice
provided by law, Landlord may, from time to time, without
terminating any portion of this Lease, re-let such Leased
Property or any part of such Leased Property, either alone
or in conjunction with other portions of the Improvements of
which such Leased Property are a part, in Landlord's name
but for the account of Tenant, for such term or terms (which
may be greater or less than the period which would otherwise
have constituted the balance of the Term of this Lease) and
on such terms and conditions (which may include concessions
of free rent, and the alteration and repair of such Leased
Property) as Landlord, in its uncontrolled discretion, may
determine. Landlord may collect and receive the Rents for
such Leased Property. Landlord will not be responsible or
liable for any failure to re-let such Leased Property, or
any part of such Leased Property, or for any failure to
collect any Rent due upon such re-letting. No such re-entry
or taking possession of such Leased Property by Landlord
will be construed as an election on Landlord's part to
terminate this Lease unless a written notice of such
intention is given to Tenant. No notice from Landlord under
this Lease or under a forcible entry and detainer statute or
similar law will constitute an election by Landlord to
terminate this Lease unless such notice specifically says
so. Landlord reserves the right following any such re-entry
or re-letting, or both, to exercise its right to terminate
this Lease by giving Tenant such written notice, and, in
that event such Lease will terminate as specified in such
notice.
(c) If Landlord elects to take possession of a Leased Property
according to subparagraph (b) of this Section 9.02 without
terminating this Lease, Tenant will pay Landlord (A) the
Rent and other sums which would be payable under this Lease
with respect to such Leased Property if such repossession
had not occurred, less (B) the net proceeds, if any, of any
re-letting of such Leased Property after deducting all of
Landlord's expenses incurred in connection with such re-
letting, including without limitation, all repossession
costs, brokerage commissions, legal expense, attorneys'
fees, expense of employees, alteration, remodeling,
31
repair costs, and expense of preparation for such re-
letting. If, in connection with any re-letting, any
resulting lease term for the subject Leased Property extends
beyond the existing Term or Extension Term, as the case may
be, or such Leased Property covered by such re-letting
includes areas which are not part of such Leased Property, a
fair apportionment of the Rent received from such re-letting
and the expenses incurred in connection with such re-letting
will be made in determining the net proceeds received from
such re-letting. In addition, in determining the net
proceeds from such re-letting, any rent concessions will be
apportioned over the term of the new lease. Tenant will pay
such amounts to Landlord monthly on the days on which the
Rent and all other amounts owing under this Lease would have
been payable if possession had not been retaken, and
Landlord will be entitled to receive the rent and other
amounts from Tenant on each such day. Notwithstanding
anything herein to the contrary, Landlord, at its option,
may collect and apply any Rent received from such re-letting
in accordance herewith and in such case shall remit any
balance thereof to Tenant. Landlord shall incur no liability
or obligation to Tenant arising out of the collection or
application of Rent by Landlord hereunder.
(d) Landlord may re-enter the applicable Leased Property and
have, repossess and enjoy such Leased Property as if this
Lease had not been made, and in such event, Tenant and its
successors and assigns shall remain liable for any
contingent or unliquidated obligations or sums owing at the
time of such repossession.
(e) Landlord may take whatever action at law or in equity as may
appear necessary or desirable to collect the Rent and other
amounts payable hereunder with respect to the subject Leased
Property then due and thereafter to become due, or to
enforce performance and observance of any obligations,
agreements or covenants of Tenant under this Lease.
9.03 Right of Set-Off. Landlord may, and is hereby authorized by
Tenant, at any time and from time to time, after advance notice to Tenant, to
set-off and apply any and all sums held by Landlord in respect of a Leased
Property, including all sums held in any escrow for Impositions, any
indebtedness of Landlord to Tenant, and any claims by Tenant against Landlord,
against any obligations of Tenant under this Lease in respect of such Leased
Property and against any claims by Landlord against Tenant, whether or not
Landlord has exercised any other remedies hereunder. Landlord shall set-off and
apply such sums first, to delinquent real estate taxes, unless such taxes are
being protested in good faith and no lien has attached to any
32
Leased Property with respect thereto, second, to currently due and owing real
estate taxes, and next, to other Tenant's obligations in the order which
Landlord may determine. The rights of Landlord under this Section are in
addition to any other rights and remedies Landlord may have against Tenant.
9.04 Performance of Tenant's Covenants. Landlord may, without
waiving or releasing any obligation of Tenant, and without waiving or releasing
any obligation or default, perform any obligation of Tenant which Tenant has
failed to perform within five (5) business days after Landlord has sent a
written notice to Tenant informing it of its specific failure (provided no such
notice shall be required if Landlord has previously notified Tenant of such
failure under the provisions of Section 9.01). In the event Landlord deems, in
its discretion, that Tenant's failure to perform such obligation has given rise
to an emergency situation, Landlord may perform such obligation without waiving
or releasing any obligation of Tenant, and without waiving or releasing any
obligation or default; provided, however, that Landlord shall notify Tenant of
such performance as soon as it is reasonably practicable to do so. Tenant shall
reimburse Landlord on demand, as Additional Rent, for any expenditures thus
incurred by Landlord and shall pay interest thereon at the New York Prime Rate.
9.05 Late Charge. Any payment not made by Tenant for more than
five (5) business days after the due date shall be subject to a late charge
payable by Tenant as Rent of four percent (4%) of the amount of such overdue
payment. Notwithstanding the foregoing, in the event that Tenant's payment is
not made more than five (5) business days after the due date more than two (2)
times during any twelve (12) month period, any such subsequent overdue payments
within the twelve (12) months immediately following such second failure shall be
subject to a late charge payable by Tenant as Rent of seven percent (7%) of the
amount of such overdue payment.
9.06 Litigation; Attorneys' Fees. Within ten (10) days after
Tenant has knowledge of any litigation or other proceeding related to or arising
out of this Agreement or the Leased Property in which claims are asserted in an
amount in excess of $50,000, that (1) may be instituted against Tenant, (2) may
be instituted against any Leased Property to secure or recover possession
thereof, or (3) may affect the title to or the interest of Landlord in any
Leased Property, Tenant shall give written notice thereof to Landlord. In the
event that Landlord determines that Tenant has failed to give adequate
cooperation or information with respect to any such litigation, investigation,
receivership, administrative, bankruptcy, insolvency or other similar
proceeding, Landlord may, after notice to Tenant, undertake such investigation
or proceeding and Tenant shall pay all reasonable costs and expenses (the
"Costs") related thereto that are incurred by Landlord, whether or not Landlord
has received notice from Tenant of such investigation or proceeding, and whether
or not an Event of Default has actually occurred or has been declared and
thereafter cured, which Costs shall include, without limitation: (a) the fees,
expenses, and costs of any litigation, investigation, receivership,
administrative, bankruptcy, insolvency or other similar proceeding; (b)
reasonable attorney, paralegal, consulting and witness fees and disbursements;
and (c) the expenses, including, without limitation, lodging, meals, and
33
transportation, of Landlord and its employees, agents, attorneys, and witnesses
in investigating or preparing for litigation, administrative, bankruptcy,
insolvency or other similar proceedings and attendance at hearings, depositions,
and trials in connection therewith. Within ten (10) days of Landlord's
presentation of an invoice of Costs incurred by Landlord pursuant to the
preceeding sentence or otherwise incurred by Landlord in enforcing or preserving
Landlord's rights under this Lease, whether or not an Event of Default has
actually occurred or has been declared and thereafter cured, Tenant shall pay
all such Costs. All such Costs as incurred shall be deemed to be Additional
Rent under this Lease.
9.07 Remedies Cumulative. The remedies of Landlord herein are
cumulative to and not in lieu of any other remedies available to Landlord at law
or in equity. The use of, or failure to use, any one remedy shall not be taken
to exclude or waive the right to use any other remedy.
9.08 Escrows and Application of Payments. As security for the
performance of its obligations hereunder, Tenant hereby assigns to Landlord all
its right, title and interest in and to all monies escrowed with Landlord under
this Lease and all deposits with utility companies, taxing authorities, and
insurance companies; provided, however, that Landlord shall not exercise its
rights hereunder with respect to any Leased Property until an Event of Default
has occurred in respect of such Leased Property. Any payments received by
Landlord under any provisions of this Lease during the existence, or continuance
of an Event of Default shall be applied to Tenant's obligations, first, to
delinquent real estate taxes, unless such taxes are being protested in good
faith and no lien has attached to any Leased Property with respect thereto,
second, to currently due and owing real estate taxes, and next, to other
Tenant's obligations in the order which Landlord may determine.
9.09 Power of Attorney. Tenant hereby irrevocably and
unconditionally appoints Landlord, or Landlord's authorized officer, agent,
employee or designee, as Tenant's true and lawful attorney-in-fact, to act,
after an Event of Default, for Tenant in Tenant's name, place, and stead, and
for Tenant's and Landlord's use and benefit, to execute, deliver and file all
applications and any and all other necessary documents or things, to effect a
transfer, reinstatement, renewal and/or extension of any and all licenses and
other governmental authorizations issued to Tenant in connection with Tenant's
operation of the Leased Properties, and to do any and all other acts incidental
to any of the foregoing. Tenant irrevocably and unconditionally grants to
Landlord as its attorney-in-fact full power and authority to do and perform,
after an Event of Default, every act necessary and proper to be done in the
exercise of any of the foregoing powers as fully as Tenant might or could do if
personally present or acting, with full power of substitution, hereby ratifying
and confirming all that said attorney shall lawfully do or cause to be done by
virtue hereof. This power of attorney is coupled with an interest and is
irrevocable prior to the full performance of Tenant's obligations hereunder.
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ARTICLE X
DAMAGE AND DESTRUCTION
10.01 General. Tenant shall notify Landlord if any Leased
Property is damaged or destroyed by reason of fire or any other cause. Tenant
shall promptly repair, rebuild, or restore such Leased Property, at Tenant's
expense, so as to make such Leased Property at least equal in value to such
Leased Property existing immediately prior to such occurrence and as nearly
similar to it in character as is practicable and reasonable. Before beginning
such repairs or rebuilding, or executing any contracts in connection with such
repairs or rebuilding, Tenant will submit for Landlord's approval, which
approval Landlord will not unreasonably withhold or delay, complete and detailed
plans and specifications for such repairs or rebuilding. Promptly after
receiving Landlord's approval of the plans and specifications, Tenant will begin
such repairs or rebuilding and will oversee the repairs and rebuilding to
completion with diligence, subject, however, to strikes, lockouts, acts of God,
embargoes, governmental restrictions, and other causes beyond Tenant's
reasonable control. Landlord will make available to Tenant the net proceeds of
any fire or other casualty insurance paid to Landlord for such repair or
rebuilding as the same progresses, after deduction of any costs of collection,
including attorneys' fees. Payment will be made against properly certified
vouchers of a competent architect in charge of the work and approved by
Landlord. Prior to commencing the repairing or rebuilding, Tenant shall deliver
to Landlord for Landlord's approval a schedule setting forth the estimated
monthly draws for such work. Landlord will contribute to such payments out of
the insurance proceeds an amount equal to the proportion that the total net
amount received by Landlord from insurers bears to the total estimated cost of
the rebuilding or repairing, multiplied by the payment by Tenant on account of
such work. Landlord may, however, withhold ten percent (10%) from each such
payment and shall disburse such amount after: (a) the work of repairing or
rebuilding is completed and proof has been furnished to Landlord that no lien or
liability has attached or will attach to such Leased Property or to Landlord in
connection with such repairing or rebuilding and (b) Tenant has obtained a
certificate of use and occupancy (or its functional equivalent) for the portion
of such Leased Property being repaired or rebuilt. Upon the completion of
rebuilding or repairing and the furnishing of such proof, the balance of the net
proceeds of such insurance payable to Tenant on account of such repairs or
rebuilding will be paid to Tenant. Tenant will obtain and deliver to Landlord a
temporary or final certificate of occupancy before such Leased Property is
reoccupied for any purpose. Tenant shall complete such repairs or rebuilding
free and clear of mechanic's or other liens, and in accordance with the building
codes and all applicable laws, ordinances, regulations, or orders of any state,
municipal, or other public authority affecting the repairs or rebuilding, and
also in accordance with all requirements of the insurance rating organization,
or similar body. Any remaining proceeds of insurance after such restoration
will be Tenant's property.
10.02 Landlord's Inspection. During the progress of such repairs
or rebuilding, Landlord and its architects and engineers may, from time to time,
inspect the subject Leased Property and will be furnished, if required by them,
with copies of all plans, shop drawings, and specifications relating to such
repairs or rebuilding. Tenant will keep all plans, shop drawings,
35
and specifications available, and Landlord and its architects and engineers may
examine them at all reasonable times. If, during such repairs or rebuilding,
Landlord and its architects and engineers determine that the repairs or
rebuilding are not being done in accordance with the approved plans and
specifications, Landlord will give prompt notice in writing to Tenant,
specifying in detail the particular deficiency, omission, or other respect in
which Landlord claims such repairs or rebuilding do not accord with the approved
plans and specifications. Upon the receipt of any such notice, Tenant will cause
corrections to be made to any deficiencies, omissions, or such other respect.
Tenant's obligations to supply insurance, according to Article IV, will be
applicable to any repairs or rebuilding under this Section 10.02.
10.03 Landlord's Costs. Tenant shall, within fifteen (15) days
after receipt of an invoice from Landlord, pay the reasonable costs, expenses,
and fees of any architect or engineer employed by Landlord to review any plans
and specifications and to supervise and approve any construction, or for any
services rendered by such architect or engineer to Landlord as contemplated by
any of the provisions of this Lease, or for any services performed by Landlord's
attorneys in connection therewith; provided, however, that Landlord will consult
with Tenant and notify Tenant of the estimated amount of such expenses.
10.04 Rent Abatement. In the event that the provisions of Section
10.01 above shall become applicable as to any Leased Property, and subject to
the last sentence of this Section 10.04, the applicable Base Annual Rent shall
be abated or reduced proportionately during any period in which, by reason of
such damage or destruction, there is substantial interference with the operation
of the Business of Tenant in such Leased Property, having regard to the extent
to which Tenant may be required to discontinue any Business on such Leased
Property, and such abatement or reduction shall continue for the period
commencing with such destruction or damage and ending with the substantial
completion by Tenant of such work or repair and/or reconstruction. In the event
that only a portion of any Leased Property is rendered untenantable or incapable
of such use, the Base Annual Rent payable hereunder in respect thereof shall be
reduced proportionately considering the extent to which the Tenant is unable to
practicably use the Leased Property for Business. Tenant shall use reasonably
diligent efforts to make the Leased Property tenantable and capable of such use.
Notwithstanding any other provision hereof, such rental abatement shall be
limited to the amount of any rental or Business interruption insurance proceeds
actually received by Landlord under Article IV.
10.05 Substantial Damage During Lease Term. Provided Tenant has
fully complied with Section 4.01 hereof (including actually maintaining in
effect rental value insurance or Business interruption insurance provided for in
clause (c) thereof) and has satisfied the conditions of the last sentence of
this Section 10.05, if, at any time during the Term or any Extension Term, as
the case may be, of this Lease, any Leased Property is so damaged by fire or
otherwise that it is Completely Destroyed or Partially Destroyed (as such terms
are hereafter defined), Tenant may, within one hundred and eighty (180) days
after such damage, give notice of its election to terminate this Lease with
respect to such Leased Property and, subject to the further provisions of this
Section, this Lease will cease with respect to such Leased Property on
36
the thirtieth (30th) day after the delivery of such notice. If the Lease is so
terminated, Tenant will have no obligation to repair, rebuild or replace such
Leased Property, and the entire insurance proceeds will belong to Landlord. If
the Lease is not so terminated, Tenant shall rebuild such Leased Property in
accordance with Section 10.01. If Tenant elects to terminate this Lease pursuant
to this Section 10.05, Tenant will pay (or cause to be paid) to Landlord, an
amount equal to the excess amount, if any, of the book value of the damaged
property as shown in Landlord's financial statements as of the date of such
termination, over the amount of all insurance proceeds received by Landlord. A
Leased Property shall be deemed to be "Completely Destroyed" if there is
sufficient damage to such Leased Property that Landlord and Tenant agree to its
classification as such. A Leased Property shall be deemed to be "Partially
Destroyed" if, as a result of damages to it, a substantial part of the Business
(as determined by a reasonable dealer in the trade, in light of standard trade
practices) cannot be conducted on it within one hundred and eighty (180) days of
the occurrence of such damages. In the event that Landlord and Tenant are unable
to agree to a determination of whether any Leased Property is Completely
Destroyed, Partially Destroyed or otherwise, such determination shall be made
pursuant to the Arbitration provisions set forth in Article XIV.
10.06 Damage Near End of Term. Notwithstanding any provisions of
Sections 10.01 or 10.05 to the contrary, if damage to or destruction of any
Leased Property occurs during the last twenty-four (24) months of the Term, and
if such damage or destruction renders the Leased Property Completely Destroyed
or Partially Destroyed, either party shall have the right to terminate this
Lease as to such Leased Property by giving notice to the other within ten (10)
days after the date of damage or destruction, in which event Landlord shall be
entitled to retain the insurance proceeds and Tenant shall pay to Landlord on
demand the amount of any deductible or uninsured loss arising in connection
therewith; provided, however, that any such notice given by Landlord shall be
void and of no force and effect if Tenant exercises an available option for an
Extension Term with respect to such Leased Property pursuant to provisions of
this Lease within ten (10) business days following receipt of such termination
notice.
10.07 Risk of Loss. Notwithstanding anything herein to the
contrary, during the Term or any Extension Term, as the case may be, the risk of
loss of or decrease in the enjoyment and beneficial use of the Leased Properties
in consequence of the damage or destruction thereof by fire, the elements,
casualties, thefts, riots, wars or otherwise is assumed by Tenant, and Landlord
shall in no event be answerable or accountable therefor except in the case of
gross negligence, willful misconduct or breach of this Lease by Landlord
resulting in such damage or destruction. In addition, all risk of loss or
decrease in enjoyment and beneficial use in consequence of foreclosures,
attachments, levies or executions is assumed by Tenant except for foreclosure
due to Landlord's indebtedness.
37
ARTICLE XI
CONDEMNATION
11.01 Total Taking. If at any time during the Term or any
Extension Term, as the case may be, any Leased Property is totally and
permanently taken by right of eminent domain or by conveyance made in response
to the threat of the exercise of such right ("Condemnation"), this Lease shall
terminate as to such Leased Property on the Date of Taking (which shall mean the
date the condemning authority has the right to possession of the property being
condemned), and Tenant shall promptly pay all outstanding applicable Rent and
other charges through the date of termination, provided, however, this Lease
shall not so terminate if the Condemnation occurred due to the failure of Tenant
to maintain such Leased Property as required by Article VII hereof or other
applicable provisions hereof, whether or not such failure on the part of Tenant
constituted an Event of Default hereunder at the time of the Condemnation.
11.02 Partial Taking. If a portion of a Leased Property is taken
by Condemnation, this Lease shall remain in effect as to such Leased Property if
such Leased Property is not thereby rendered Unsuitable for the continuation of
Tenant's Business on that Leased Property (which shall mean that such Leased
Property is in such a state or condition such that in the good faith judgment of
Tenant, reasonably exercised, it cannot be used on a commercially practicable
basis in the operation of the Business), but if such Leased Property is thereby
rendered Unsuitable for the continuation of Tenant's Business on that Leased
Property, this Lease shall terminate as to such Leased Property on the Date of
Taking, provided such Condemnation was not as a result of Tenant's failure to
maintain such Leased Property as provided for in Section 11.01.
11.03 Restoration. If there is a partial taking of any Leased
Property and this Lease remains in full force and effect pursuant to Section
11.02, Landlord shall retain the amount of any Landlord Award (as hereafter
defined) received by Landlord, Landlord shall apply such Landlord Award to
accomplish all necessary restoration to the Leased Property, and any excess
after such application shall be retained by Landlord. If there is a partial
taking of any Leased Property and this Lease remains in full force and effect
pursuant to Section 11.02, Tenant shall retain the amount of any Tenant Award
(as hereafter defined) received by Tenant, Tenant shall apply such Tenant Award
to accomplish all necessary restoration of Tenant's property, and any excess
after such application shall be retained by Tenant. Notwithstanding anything in
this Section to the contrary, in the event that there is a partial taking of any
Leased Property and this Lease remains in full force and effect pursuant to
Section 11.02, and there is a single Award with respect to such partial taking,
then the Landlord and Tenant shall use their good faith efforts to determine the
proper apportionment of such Award (as hereafter defined) to restoration of
Landlord's and Tenant's respective properties. In the event that the parties
are unable to agree on such apportionment within thirty (30) days, the parties
shall submit to arbitration of an apportionment subject to the arbitration
provisions set forth in Article XIV.
11.04 Landlord's Inspection. During the progress of such
restoration, Landlord
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and its architects and engineers may, from time to time, inspect the subject
Leased Property and will be furnished, if required by them, with copies of all
plans, shop drawings, and specifications relating to such restoration. Tenant
will keep all plans, shop drawings, and specifications available, and Landlord
and its architects and engineers may examine them at all reasonable times. If,
during such restoration, Landlord and its architects and engineers determine
that the restoration is not being done in accordance with the approved plans and
specifications, Landlord will give prompt notice in writing to Tenant,
specifying in detail the particular deficiency, omission, or other respect in
which Landlord claims such restoration does not accord with the approved plans
and specifications. Upon the receipt of any such notice, Tenant will cause
corrections to be made to any deficiencies, omissions, or such other respect.
Tenant's obligations to supply insurance, according to Article IV, will be
applicable to any restoration under this Section.
11.05 Award Distribution. The entire compensation, sums or
anything of value awarded, paid or received on a total or partial Condemnation
of a Leased Property that is awarded to Landlord shall belong to Landlord (the
"Landlord Award"). The entire compensation, sums or anything of value awarded,
paid or received on a total or partial Condemnation of a Leased Property that is
awarded to Tenant shall belong to Tenant (the "Tenant Award", collectively with
the Landlord Award, the "Awards", and each, individually, an "Award").
Notwithstanding anything in this Section to the contrary, in the event that
there is a total or partial Condemnation of a Leased Property and there is a
single Award with respect to such Condemnation, then the Landlord and Tenant
shall use their good faith efforts to determine the proper apportionment of such
Award to Landlord's and Tenant's respective properties. In the event that the
parties are unable to agree on such apportionment within thirty (30) days, the
parties shall submit to arbitration of an apportionment subject to the
arbitration provisions set forth in Article XIV.
11.06 Temporary Taking. The taking of any Leased Property, or any
part thereof, by military or other public authority shall constitute a taking by
Condemnation only when the use and occupancy by the taking authority has
continued for longer than twenty four (24) months. During any such twenty-four
(24) month period, which shall be a temporary taking, all the provisions of this
Lease shall remain in full force and effect as to such Leased Property with no
abatement of rent payable by Tenant hereunder. In the event of any such
temporary taking, the entire amount of any such Award made for such temporary
taking allocable to the Term hereof, whether paid by way of damages, Rent or
otherwise, shall be paid to Tenant.
39
ARTICLE XII
ADDITIONAL REPRESENTATIONS, WARRANTIES AND FINANCIAL COVENANTS
Tenant hereby represents, warrants and covenants to Landlord as
follows:
12.01 Organization and Qualification.
(a) Tenant is a [_________] corporation duly organized, validly
existing and in good standing under the laws of its state of
incorporation or organization, with all power and authority,
corporate or otherwise, necessary to: (i) enter into and
perform this Lease and (ii) own and lease its assets and
properties, and conduct its Business, as it is now being
conducted or proposed to be conducted. Tenant is duly qualified
as a foreign corporation or other entity, as the case may be,
to conduct its Business and own and lease its assets and
properties, and is in good standing, in each jurisdiction where
the character of its assets and properties owned or held under
lease or the nature of its Business makes such qualification
necessary or advisable, and is duly qualified and licensed
under all laws, regulations, ordinances or orders of public or
governmental authorities, or otherwise to carry on its Business
and own or lease its assets and properties in the places and in
the manner in which they are owned, leased or conducted or
proposed to be owned, leased or conducted, except where the
failure to be so organized, qualified and in good standing or
to have such authority, qualification or licensing could not
result in a Material Adverse Change. Complete and correct
copies of Tenant's Charter, as in effect on the date hereof,
and Tenant's by-laws, also as in effect on the date hereof,
have been delivered to Landlord.
(b) Each Affiliate that conducts operations or business on or from
any Leased Property, whether now or at any time in the future,
is duly organized, validly existing and in good standing under
the laws of its organization, with all power and authority,
corporate or otherwise, necessary to own and lease its assets
and properties, and conduct its business, as it is now being
conducted or proposed to be conducted. Each Affiliate is duly
qualified as a foreign corporation or other entity, as the case
may be, to do business and own and lease its assets and
properties, and is in good standing, in each jurisdiction where
the character of its assets and properties owned or held under
lease or the nature of its activities or business makes such
qualification necessary or advisable, and is duly qualified and
licensed under all laws, regulations, ordinances or orders or
public or governmental authorities or otherwise to carry on its
business and own or lease its assets and properties in the
places and in the manner in which they are owned, leased or is
conducted or proposed to be owned, leased or conducted,
40
except where the failure to be so organized, qualified and in
good standing or to have such authority, qualification or
licensing could not result in a Material Adverse Change.
"Material Adverse Change" since a particular specified date, or a date
which may be specified from the circumstances existing immediately prior to the
happening of a specified event or occurrence, or, if no date or event is
specified, with reference to the most recent Annual Financial Statements
delivered pursuant to this Lease, means a material adverse change in the
Business, assets, properties, franchises, financial condition or income of
Tenant or the operations, business, assets, properties, franchises, financial
condition, income or prospects of any Affiliate, whether or not such event or
occurrence is an Event of Default. Nothing that would otherwise be a breach of
any representation, warranty, covenant or obligation herein by any Affiliate
shall be a breach of this Agreement, unless such breach constitutes or causes a
material adverse effect on the Business.
"Affiliate" means with respect to any Person, (i) any Person that
holds direct or indirect beneficial ownership (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended) of voting securities or other
voting interests representing at least five percent (5%) of the outstanding
voting power of a Person or equity securities or other equity interests
representing at least five percent (5%) of the outstanding equity securities or
interests in a Person, or (ii) any Person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with such Person.
A "Person" shall mean and include natural persons, corporations,
limited partnerships, general partnerships, joint stock companies, joint
ventures, associations, companies, trusts, banks, trust companies, land trusts,
business trusts, Indian tribes or other organizations, whether or not legal
entities, and governments and agencies and political subdivisions thereof.
12.02 Material Agreements. Tenant has previously furnished to
Landlord correct and complete copies of (including all exhibits, schedules and
amendments thereto) each agreement listed in Exhibit 12.02, each as in effect on
the date hereof (the "Material Agreements").
12.03 Changes in Condition. Since the date of the latest Annual
Financial Statements, no Material Adverse Change has occurred between such date
and the date hereof, and neither Tenant nor any Affiliate has entered into any
material transaction outside the ordinary course of its or their operations or
business, including the Business, except as set forth in Exhibit 12.03 and the
matters contemplated by this Lease.
12.04 Franchises, Licenses, etc. Tenant and its subsidiaries own,
or have sufficient interests in, all franchises, trademarks, trademark rights,
trade names, trade name rights, copyrights, licenses, permits, authorizations
and other rights as are necessary for the conduct of Tenant's Business and its
subsidiaries' businesses as now conducted or proposed to be
41
conducted by Tenant or any Affiliate, as well as rights under any agreement
under which Tenant or its subsidiaries has access to confidential information
used by Tenant or its subsidiaries in Tenants' Business or the businesses of its
subsidiaries, as the case may be (collectively, the "Intellectual Property").
All Intellectual Property is in full force and effect in all material respects,
and Tenant and its subsidiaries are in substantial compliance with the foregoing
without any conflict with the valid rights of others, which has resulted, or
could be reasonably likely to result in any Material Adverse Change. Neither
Tenant nor any Affiliate has violated, or received any communication that by
conducting its Business or any Affiliate's businesses, it or any Affiliate would
violate any franchises, licenses, patents, trademarks, service marks, trade
names, copyrights, trade secrets, proprietary rights or processes of any other
Person (as hereafter defined) nor is Tenant or any Affiliate aware of any such
violations. No event has occurred which permits, or after notice or lapse of
time or both would permit, the revocation or termination of any such license,
franchise or other right or affect the rights of Tenant or any Affiliate so as
to result in or reasonably be likely to result in any Material Adverse Change.
There is no litigation or other proceeding or dispute or, to the knowledge of
Tenant or any Affiliate, threat thereof with respect to the validity or, where
applicable, the extension or renewal, of any of the foregoing which has
resulted, or could result, in any Material Adverse Change.
12.05 Litigation. No litigation, at law or in equity, or any
proceeding before any court, board or other governmental or administrative
agency or any arbitrator or other forum of alternative dispute resolution is
pending or, to the knowledge of Tenant or any Affiliate, threatened which
involves any risk of any final judgment, order or liability which, after giving
effect to any applicable insurance, has resulted, or could result, in any
Material Adverse Change or which seeks to enjoin the execution and consummation
of this Lease and the performance of Tenant's obligations hereunder. No
judgment, decree or order of any court, board or other governmental or
administrative agency or any arbitrator has been issued against or binds Tenant
or any Affiliate, which has resulted, or could result, in any Material Adverse
Change.
12.06 Authorization and Enforceability. Tenant has taken all corporate
or other action required to execute, deliver and perform this Lease. This Lease
constitutes the legal, valid and binding obligation of Tenant and is enforceable
against Tenant in accordance with its terms.
12.07 No Legal Obstacle to Lease. Neither the execution and delivery
of this Lease nor the performance of any obligation hereunder has constituted or
resulted in or will constitute or result in:
(a) any breach, violation of, conflict with, default under or
termination of any agreement, contract, mortgage,
instrument, deed or lease to which Tenant or any Affiliate
is a party or by which it or they are bound;
(b) the violation of or conflict with any law, statute,
ordinance,
42
judgment, decree, order, rule or regulation applicable to
Tenant, any Affiliate, any Improvements or any Leased
Property; or
(c) any violation of or conflict with Tenant's or any
Affiliate's Charter or By-Laws or other organizational
documents, as the case may be.
No approval, authorization or other action by, or declaration to or
filing with, any governmental or administrative authority or any other Person is
required to be obtained or made by Tenant in connection with the execution,
delivery and performance of this Lease.
12.08 Certain Business Representations:
(a) Labor Relations. No dispute or controversy between Tenant or
any Affiliate and its or their employees has resulted in, or
is reasonably likely to result in, any Material Adverse
Change, and neither Tenant nor any Affiliate anticipates
that its relationships with its unions or employees will
result, or are reasonably likely to result, in any Material
Adverse Change. Tenant and each Affiliate is in compliance
in all material respects with all federal and state laws
relating to employees and labor relations, including, but
not limited to, laws relating to health and safety in the
workplace, non-discrimination in employment and the payment
of wages.
(b) Antitrust. Tenant and each Affiliate is in compliance in all
material respects with all federal and state antitrust laws
relating to Tenant's Business and the subsidiaries'
businesses and the geographic concentration thereof.
(c) Consumer Protection. Neither Tenant nor any Affiliate is in
violation of any rule, regulation, order, or interpretation
of any rule, regulation or order of the Federal Trade
Commission (including truth-in-lending) or other federal,
state or local public or governmental authority or agency,
with which the failure to comply, in the aggregate, has
resulted in, could result in, a Material Adverse Change.
(d) Future Expenditures. Neither Tenant nor any Affiliate,
anticipates that further expenditures, if any, by Tenant or
any Affiliate needed to meet the provisions of any federal,
state or foreign governmental statutes, orders, rules or
regulation could result in any Material Adverse Change.
(e) Benefit Liabilities. Neither Tenant nor any ERISA Affiliate
(as
43
hereafter defined) maintains, contributes to, or is
obligated to contribute to, nor has Tenant or any ERISA
Affiliate maintained, contributed to, been obligated to
contribute to, or had any direct, indirect, or contingent
liability with respect to, any Title IV Plan (as hereafter
defined). Tenant and each ERISA Affiliate have timely made
all contributions required to be made with respect to each
of their Tenant Benefit Plans (as hereafter defined). Each
Tenant Benefit Plan has been maintained in compliance with
its terms and with applicable laws (including specifically
the Code and the Employee Retirement Income Security Act of
1974 ("ERISA"). Neither Tenant nor any ERISA Affiliate has
incurred any obligation in connection with the termination
or withdrawal from any Tenant Benefit Plan. Contributions
made by Tenant or its ERISA Affiliates, as the case may be,
to any Tenant Benefit Plan have been accounted for, and the
liabilities associated therewith are disclosed, in Tenant's
or its ERISA Affiliates', as the case may be, financial
statements for the fiscal year ending before the date as of
which this representation is given. The present value of the
accrued benefit liabilities (whether or not vested) under
each Tenant Benefit Plan, determined as of the end of
Tenant's or its ERISA Affiliates', as the case may be, most
recently ended fiscal year on the basis of actuarial
assumptions, each of which is reasonable, did not exceed the
current value of the assets of such Tenant Benefit Plan
allocable to such benefit liabilities. "Tenant Benefit Plan"
means any plan, fund, or other similar program described in
Section 3(2) of ERISA and established or maintained or with
respect to which Tenant and/or any ERISA Affiliate has an
obligation to contribute for the benefit of its employees
(or for which Tenant could be directly or contingently
liable). "Title IV Plan" means an "employee benefit plan"
(as defined in Section 3(3) of ERISA) that is subject to
Title IV of ERISA and is or has been established or
maintained, by Tenant or any ERISA Affiliate, or to which
contributions are, have been, or should have been made.
"ERISA Affiliate" means any trade or business, whether or
not incorporated, that, together with Tenant, is or has been
under common control, within the meaning of Section 414(b),
(c), (m), or (o) of the Code or Section 4001 of ERISA.
12.09 Certain Financial Covenants. Tenant or an Affiliate, as
applicable, is in compliance in all material respects with all financial
covenants required to be maintained pursuant to any franchise or other agreement
pursuant to which Tenant or such Affiliate operates its business, except in such
respects as shall not result in any franchisor under any franchise or operating
agreement to which Tenant is a party taking any action that could result in a
Material
44
Adverse Change.
12.10 Cash Flow Coverage Ratio Covenant. On the date of this
Lease and measured at a date that is twenty-four (24) months following such date
(each a "Cash Flow Measurement Date"), and on each anniversary date that is
twenty-four (24) months following a prior Cash Flow Measurement Date, Tenant
shall have maintained a Cash Flow Coverage Ratio of not less than 1.5 to 1.0
based on the Annual Financial Statements to be delivered to Landlord in
accordance with Section 6.04 hereof. "Cash Flow Coverage Ratio" means the
aggregate of net income before taxes plus mortgage interest, rent expense,
depreciation, compensation of principals of the Business, management fees plus
the annual LIFO adjustment and other non-cash expenses, less recurring capital
expenditures and gain (loss) on sale of real estate, dividends and/or profits
taken out of Tenant divided by the aggregate of the Tenant's obligations under
this Lease. Notwithstanding anything herein to the contrary, in the event that
Tenant shall not be in compliance with this covenant at a Cash Flow Measurement
Date or Tenant shall have knowledge of such non-compliance prior to any Cash
Flow Measurement Date, the Tenant shall have the right to cure such breach
through any reasonable commercial means, including, but not limited to,
providing guarantees acceptable to Landlord, increasing capital, or cross
collateralizing with any other property of Tenant or an Affiliate, provided that
such breach is cured within one hundred and eighty (180) days after Notice by
Landlord to Tenant of the existence of such breach.
12.11 Disclosure. This Lease does not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make any statement contained herein not misleading in light of the
circumstances under which it was made. To Tenant's knowledge, there is no
event, fact or occurrence that has resulted, or in the future (so far as Tenant
can reasonably foresee) could result, in any Material Adverse Change, except to
the extent that present or future general and sector-specific economic
conditions may result in a Material Adverse Change.
12.12 Covenant Not to Acquire. Tenant covenants and agrees that
during the Term and any Extension Term, as the case may be, Tenant and its
controlling shareholders or its or their Affiliates will not acquire, directly
or indirectly, more that 9.90% of the outstanding common shares of beneficial
interest of Capital Automotive REIT. Tenant covenants and agrees that it will
divest itself of such shares of Capital Automotive REIT as may be necessary to
satisfy the limitations of this Section 12.12.
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ARTICLE XIII
ASSIGNMENT AND SUBLETTING; ATTORNMENT
13.01 Prohibition Against Subletting and Assignment. Subject to
Section 13.03, Tenant shall not, without the prior written consent of Landlord,
or upon compliance with any conditions established by Landlord, in its sole
discretion, assign, mortgage, pledge, hypothecate, encumber or otherwise
transfer (except to an Affiliate) this Lease or any interest herein, or all or
any part of any Leased Property, or suffer or permit this Lease or the leasehold
estate created hereby or any other rights arising hereunder to be assigned,
transferred, mortgaged, pledged, hypothecated or encumbered, in whole or in
part, whether voluntarily, involuntarily or by operation of law. For purposes of
this Section 13.01, an assignment of this Lease shall be deemed to include any
Change of Control of Tenant, as if such Change of Control were an assignment of
the Lease. In the event that (i) Landlord shall withhold any consent to any
assignment or transfer of this Lease or any interest herein, and (ii) such
assignee or transferee is approved by the relevant manufacturer for continuation
as a franchisee, there shall be a presumption that such assignment or transfer
was reasonable and Landlord shall have the burden of rebutting such presumption
and of proving that such consent was in fact reasonably withheld (or that such
conditions were reasonable).
13.02 Changes of Control. A Change of Control requiring the consent
of Landlord shall mean:
(a) the issuance and/or sale by Tenant or the sale by any
shareholder or equity holder of Tenant of a Controlling
(which shall mean, as applied to any Person, the
possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of
such Person, whether through the ownership of voting
securities, by contract or otherwise) interest in Tenant to
a Person other than an Affiliate of Tenant, other than in
either case a distribution to the public pursuant to an
effective registration statement under the Securities Act
of 1933, as amended (a "Registered Offering");
(b) the sale, conveyance or other transfer of all or
substantially all of the assets of Tenant (whether by
operation of law or otherwise) provided, however, that no
Change of Control shall be deemed to have occurred in the
event of the transfer of assets as a result of the death of
a person involved in the Business, so long as the
transferee is approved by the manufacturer for the
continuation of the Business; or
(c) any transaction pursuant to which Tenant is merged with or
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consolidated into another entity (other than an entity
owned and Controlled by an Affiliate), and Tenant is not
the surviving entity.
13.03 Operating/Service Agreements.
(a) Permitted Agreements. Tenant shall, without Landlord's
prior approval, be permitted to enter into such
operating/service agreements for portions of each Leased
Property to various licensees in connection with Tenant's
Business as are customarily associated with or incidental
to the operation of such Leased Property, which agreements
may be in the nature of a sublease agreement.
(b) Terms of Agreements. Each operating/service agreement
concerning a Leased Property shall be subject and
subordinate to the provisions hereof. No agreement made as
permitted by Section 13.03(a) shall affect or reduce any of
the obligations of Tenant hereunder, and all such
obligations shall continue in full force and effect as if
no agreement had been made. No agreement shall impose any
additional obligations on Landlord hereunder.
(c) Copies. Tenant shall, within ten (10) days after the
execution and delivery of any operating/service agreement
permitted by Section 13.03(a), deliver a duplicate original
thereof to Landlord.
(d) Assignment of Rights in Agreements. As security for
performance of its obligations hereunder, Tenant hereby
grants, conveys and assigns to Landlord all right, title
and interest of Tenant in and to all operating/service
agreements now in existence or hereinafter entered into for
each Leased Property, and all extensions, modifications and
renewals thereof and all rents, issues and profits
therefrom, to the extent the same are assignable by Tenant.
Landlord hereby grants to Tenant a license to collect and
enjoy all rents and other sums of money payable under any
such agreement; provided, however, that Landlord shall have
the absolute right at any time after the occurrence and
continuance of an Event of Default upon notice to Tenant
and any vendors or licensees to revoke said license and to
collect such rents and sums of money and to retain the
same. Tenant shall not (i) after the occurrence and
continuance of an Event of Default, consent to, cause, or
allow, any material modification or alteration of any of
the terms, conditions or covenants of any of the agreements
or the termination thereof, without the prior written
approval of Landlord
47
nor (ii) accept any rents (other than customary security
deposits) more than thirty (30) days in advance of the
accrual thereof nor permit anything to be done, the doing
of which, nor omit or refrain from doing anything, the
omission of which, will or could be a breach of or default
in the terms of any of the agreements.
(e) Licenses, Etc. For purposes of Section 13.03, the
operating/service agreements shall mean any licenses,
concession arrangements, or other arrangements relating to
the possession or use of all or any part of any Leased
Property.
13.04 Assignment. If Landlord shall withhold its consent to any
assignment or if Landlord shall have established conditions to approval of any
assignment but such conditions shall not have been complied with, to the
satisfaction of Landlord, such assignment shall not in any way impair the
continuing primary liability of Tenant hereunder. No consent to any assignment
in a particular instance shall be deemed to be a general waiver of the
prohibition set forth in Article XIII. Any assignment shall be solely of
Tenant's entire interest in this Lease with respect to the subject Leased
Property or Leased Properties. Any assignment or other transfer of all or any
portion of Tenant's interest in this Lease in contravention of Article XIII
shall be voidable at Landlord's option.
13.05 REIT Limitations.
(a) Anything contained herein to the contrary notwithstanding,
Tenant shall not: (a) sublet or assign a Leased Property or
this Lease on any basis such that the rental or other
amounts to be paid by the sublessee or assignee thereunder
would be based, in whole or in part, on the income or
profits derived by the business activities of the sublessee
or assignee; (b) sublet or assign a Leased Property or this
Lease to any Person that, under Section 856(d)(2)(B) of the
Internal Revenue Code of 1986, as amended (the "Code"),
Landlord or its general partner owns, directly or
indirectly (by applying constructive ownership rules set
forth in Section 856(d) (5) of the Code, a ten percent
(10%) or greater interest; or (c) sublet or assign a Leased
Property or this Lease in any other manner or otherwise
derive any income which could cause any portion of the
amounts received by Landlord pursuant hereto or any
sublease to fail to qualify as "rents from real property"
within the meaning of Section 856(d) of the Code, or which
could cause any other income received by Landlord to fail
to qualify as income described in Section 856(c) (2) of the
Code. The requirements of this Section 13.05 shall likewise
apply to any further subleasing by any subtenant.
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(b) Tenant acknowledges that Capital Automotive REIT, a Maryland
real estate investment trust and the general partner of
Landlord (the "Company"), intends to elect to be taxed as a
real estate investment trust (a "REIT") under the Code.
Tenant shall not do anything which would adversely affect
the Company's status as a REIT. Tenant hereby agrees to
modifications of this Lease which do not materially
adversely affect Tenant's rights and liabilities if such
modifications are required to retain or clarify the
Company's status as a REIT.
13.06 Attornment. Tenant shall insert in each sublease permitted under
Section 13.03(a) provisions to the effect that: (a) such sublease is subject and
subordinate to all of the terms and provisions of this Lease and to the rights
of Landlord hereunder; (b) in the event this Lease shall terminate before the
expiration of such sublease, the sublessee thereunder will, at Landlords'
option, attorn to Landlord and waive any right the sublessee may have to
terminate the sublease or to surrender possession thereunder, as a result of the
termination hereof; and (c) in the event the sublessee receives a written notice
from Landlord or Landlord's assignees, if any, stating that Tenant is in default
under this Lease, the sublessee shall thereafter be obligated to pay all rentals
accruing under said sublease directly to the party giving such notice, or as
such party may direct. All rentals received from the sublessee by Landlord or
Landlord's assignees in respect of a Leased Property, if any, as the case may
be, shall be credit against the amounts owing by Tenant hereunder with respect
to such Leased Property.
13.07 Severance and Spin-Off. If at any time while this Lease is in
effect any Leased Property shall be utilized by Tenant in the operation of more
than one automobile franchise, then provided that there is no existing Event of
Default and there exists no condition which, with the passage of time, could
become an Event of Default, Tenant shall have the right (the "Spin-Off Right")
to sever and spin-off one or more parcels (each referred to as a "Spin-Off
Parcel") of the Leased Property from this Lease, subject to compliance with the
requirements of Section 13.08.
13.08 Assignment. If the Leased Property is not a separate subdivided
lot, Landlord may condition its approval of an assignment upon Tenant showing
that there are appropriate provisions (such as a condominium regime,
subdivision, and/or reciprocal easements, lender and/or franchisor consents if
necessary, and separate tax lots) which allow the Leased Property to be
separately owned and operated without interference from or dependence upon,
another person as to items such as access, real estate taxes, or utilities.
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ARTICLE XIV
ARBITRATION
14.01 Controversies. Except with respect to the payment of Rent
hereunder, which shall be subject to the provisions of Section 9.02, in the
event a controversy arises between the parties as to any of the requirements of
this Lease or the performance hereunder, which the parties are unable to
resolve, the parties agree to waive the remedy of litigation (except for
extraordinary relief in an emergency situation) and agree that such controversy
or controversies shall be determined by arbitration as hereafter provided in
this Article.
14.02 Appointment of Arbitrators. The party or parties requesting
arbitration shall serve upon the other a demand therefor, in writing, specifying
in detail the controversy and matter(s) to be submitted to arbitration before
the American Arbitration Association. The selection of arbitrators shall be
conducted pursuant to the rules for resolution of commercial disputes
promulgated by the American Arbitration Association. The party or parties
giving notice shall request a listing of available arbitrators from the American
Arbitration Association, and each party shall respond in the selection process
within fifteen (15) days after each receipt of such listings until a panel of
three (3) arbitrators has been designated. If either party fails to respond
within fifteen (15) days, it is agreed that the American Arbitration Association
may make such selections as are necessary to complete the panel of three (3)
arbitrators.
14.03 Arbitration Procedure. Within five (5) business days after
the selection of the arbitration panel, the arbitrators shall give written
notice to each party as to the time and the place of each meeting, which shall
be held in Washington, D.C., at which the parties may appear and be heard, which
shall be no later than fifteen (15) days after certification of the arbitration
panel. The parties specifically waive discovery, and further waive the
applicability of rules of evidence or rules of procedure in the proceedings. The
applicable rules shall be those in effect at the time for the resolution of
commercial disputes promulgated by the American Arbitration Association.
Notwithstanding the foregoing, the substantive law governing the arbitration
shall be the laws of the State of Delaware (without application of choice of law
provisions). The arbitrators shall take such testimony and make such
examination and investigations as the arbitrators reasonably deem necessary.
The decision of the arbitrators shall be in writing signed by a majority of the
panel which decision shall be final and binding upon the parties to the
controversy. Provided, however, in rendering their decisions and making awards,
the arbitrators shall not add to, subtract from or otherwise modify the
provisions of this Lease.
14.04 Expenses. The expenses of the arbitration shall be assessed
by the arbitrators and specified in the written decision. In the absence of a
determination or assessment of expenses of the arbitration procedure in the
award, all of the expenses of such arbitration shall be divided equally between
Landlord and Tenant. Each party in interest shall be responsible for and pay
the fees, costs and expenses of its own counsel, unless the arbitration award
provides for an assessment of reasonable attorneys' fees and costs.
50
14.05 Enforcement of the Arbitration Award. There shall be no
appeal from the decision of the arbitrators, and upon the rendering of an award,
any party thereto may file the arbitrators' decision in the United States
District Court for the Eastern District of Virginia for enforcement as provided
by applicable law.
ARTICLE XV
QUIET ENJOYMENT, SUBORDINATION,
ATTORNMENT, ESTOPPEL CERTIFICATES
15.01 Quiet Enjoyment. So long as Tenant performs all of its
obligations under this Lease, Tenant's possession of the Leased Properties will
not be disturbed by or through Landlord.
15.02 Landlord Mortgages; Subordination. Subject to Section
15.03, without the consent of Tenant, Landlord may, from time to time, directly
or indirectly, create or otherwise cause to exist any liens, encumbrances,
security interests or title retention agreements on any Leased Property, or any
portion thereof or any interest therein, whether to secure any borrowing or
other means of financing or refinancing. Tenant shall execute, acknowledge and
deliver to Landlord, at any time and from time to time upon demand by Landlord
or any mortgagee or any holder of any mortgage or other instrument described in
this Section, without cost to Landlord, a Subordination and Non-Disturbance
Agreement in the form attached hereto as Exhibit 15.02, which provides that (i)
Tenant's rights hereunder are subordinate to any ground lease or underlying
lease, first mortgage, first deed of trust, or other first lien against any
Leased Property, together with any renewal, consolidation, extension,
modification, or replacement thereof, which now or at any subsequent time
affects any Leased Property or any interest of Landlord in any Leased Property,
except to the extent that any such instrument expressly provides that this Lease
is superior; and (ii) in the event such party succeeds to Landlord's interest
under the Lease and provided that no Event of Default by Tenant exists, such
party will not disturb Tenant's possession, use or occupancy of the subject
Leased Property. If Tenant fails or refuses to execute, acknowledge, and
deliver such Subordination and Non-Disclosure Agreement within ten (10) business
days after written demand, then Landlord shall send to Tenant a second written
demand. If Tenant fails or refuses to execute, acknowledge and deliver such
Subordination and Non-Disclosure Agreement within ten (10) days after such
second written demand, then Landlord or such successor in interest may execute,
acknowledge and deliver such Subordination and Non-Disclosure Agreement on
behalf of Tenant as Tenant's attorney-in-fact. Tenant hereby constitutes and
irrevocably appoints Landlord, its successors and assigns, as Tenant's attorney-
in-fact to execute, acknowledge, and deliver on behalf of Tenant the
Subordination and Non-Disclosure Agreement. This power of attorney is coupled
with an interest and is irrevocable.
15.03 Attornment. If any holder of any mortgage, indenture, deed
of trust, or other similar instrument described in Section 15.02 succeeds to
Landlord's interest in any Leased
51
Property, Tenant will pay to such holder all Rent subsequently payable hereunder
as to such Leased Property. Tenant shall, upon request of anyone succeeding to
the interest of Landlord, automatically become the tenant of, and attorn to,
such successor in interest without changing this Lease. The successor in
interest will not be bound by: (a) any payment of Rent for more than one (1)
month in advance; (b) any amendment or modification hereof made without its
written consent; (c) any claim against Landlord arising prior to the date on
which the successor succeeded to Landlord's interest; or (d) any claim or offset
of Rent against Landlord.
15.04 Estoppel Certificates. At the request of Landlord or any
mortgagee or purchaser of a Leased Property, Tenant shall execute, acknowledge,
and deliver an estoppel certificate, in recordable form, in favor of Landlord or
any mortgagee or purchaser of any Leased Property certifying the following as to
such Leased Property: (a) that this Lease is unmodified and in full force and
effect, or if there have been modifications that the same is in full force and
effect as modified and stating the modifications; (b) the date to which Rent and
other charges have been paid; (c) that neither Tenant nor Landlord is in default
nor is there any fact or condition which, with notice or lapse of time, or both,
would constitute a default, if that be the case, or specifying any existing
default; (d) that Tenant has accepted and occupies such Leased Property; (e)
that Tenant has no defenses, set-offs, deductions, credits, or counterclaims
against Landlord, if that be the case, or specifying such that exist; (f) that
Landlord has no outstanding construction or repair obligations; and (g) such
other information as may reasonably be requested by Landlord or any mortgagee or
purchaser. Any purchaser or mortgagee may rely on this estoppel certificate.
If Tenant fails to deliver the estoppel certificates to Landlord within ten (10)
business days after the request of Landlord, then Landlord shall request such
delivery a second time. If Tenant fails to deliver the estoppel certificates to
Landlord within ten (10) days after such second request by Landlord, then Tenant
shall be deemed to have certified that: (a) this Lease is in full force and
effect and has not been modified, or that this Lease has been modified as set
forth in the certificate delivered to Tenant; (b) Tenant has not prepaid any
Rent or other charges except for the current month; (c) Tenant has accepted and
occupies such Leased Property; (d) neither Tenant nor Landlord is in default nor
is there any fact or condition which, with notice or lapse of time, or both,
would constitute a default; (e) Landlord has no outstanding construction or
repair obligation; and (f) Tenant has no defenses, set-offs, deductions,
credits, or counterclaims against Landlord. Tenant hereby irrevocably appoints
Landlord as Tenant's attorney-in-fact to execute, acknowledge and deliver on
Tenant's behalf any estoppel certificate which Tenant does not object to within
twenty (20) days after Landlord sends the certificate to Tenant. This power of
attorney is coupled with an interest and is irrevocable.
15.05 Waiver of Landlord's Lien. Landlord agrees to and does
hereby Waiver its Landlord's lien and any other rights that it may have with
respect to property or assets representing the security or collateral under
Tenant's "floor-plan" or similar financing arrangements, during the Term or any
Extension Term. Landlord shall, upon request by any such lender, execute an
acknowledgment of such waiver.
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ARTICLE XVI
RIGHT OF FIRST OFFER
16.01 Right of First Offer During Lease Term or Extension Term.
(a) If and when during the Term or Extension Term, as the case may
be, Landlord shall decide to sell the Leased Properties to a
Person who is not an Affiliate of Landlord (the "Decision to
Sell"), provided that no Event of Default has occurred and is
continuing under the Lease, Landlord shall notify Tenant in
writing within ten (10) business days after Landlord makes a
Decision to Sell. Tenant shall have ten (10) business days
thereafter in which to notify Landlord in writing of its desire
to purchase the Leased Properties. If Tenant shall give such
notice, Tenant shall have a period of thirty (30) days within
which to make a written offer to purchase the property (the
"First Offer"). The First Offer must set forth the purchase
price, deposit amounts and closing date and any and all other
terms and conditions being proposed by Tenant.
(b) Within thirty (30) days of receipt of the First Offer, Landlord
shall give Tenant written notice of its acceptance or rejection
thereof. If accepted, Tenant shall, within five (5) days after
receipt of the acceptance notice, make the deposit called for
in the First Offer and the parties shall proceed to contract
and closing upon the terms thereof. If the First Offer is
rejected, then, subject to the provisions of subsections (c)
and (d) of this Section 16.01, Tenant shall have no further
rights with respect to the purchase of the Leased Properties
during the Term or Extension Term, as the case may be.
(c) If Landlord shall reject the First Offer, for a one year period
thereafter it may proceed to sell the Leased Properties,
subject to the Lease and the remaining Term or Extension Term
thereof, as the case may be, to any third party, provided (i)
the purchase price of such sale shall exceed that specified in
the First Offer, or (ii) if the purchase price of such sale
does not exceed that specified in the First Offer, the terms of
such sale, taken together, are more favorable to Landlord, in
Landlord's reasonable judgement, than those of the First Offer.
There shall be a presumption that Landlord's judgment was
reasonable and Tenant shall have the burden of rebutting such
presumption and of proving that such judgment was in fact
unreasonable.
53
(d) If no sale is effected by Landlord within the period specified
in subsection (c) above, then if Landlord thereafter desires to
sell the Leased Properties, the procedure set forth in
subsections (a), (b) and (c) shall be followed.
(e) This option shall terminate in any event twenty (20) years
after the death of the last descendant of the father of Xxxx X.
Xxxxxxx living at the time of execution of this Lease.
16.02 Right to Purchase at End of an Extension Term.
(a) Landlord hereby grants the Tenant the right and option to
purchase the Leased Properties (the "Option to Purchase") at an
amount equal to the Property Consideration (as hereafter
defined) upon termination of an Extension Term of this Lease.
The Option to Purchase shall not be granted if Tenant does not
extend the Term of this Lease pursuant to Section 1.03 or if on
the Option Exercise Date (as hereafter defined) an Event of
Default with respect to any Leased Property exists and has not
been cured. The Tenant shall notify Landlord in writing of its
intent to exercise this Option to Purchase, thirty (30) days
prior to the end of an Extension Term of this Lease (the
"Option Exercise Date").
(b) The consideration to be paid for the Leased Properties upon
exercise of the Option to Purchase (the "Property
Consideration") shall be the Appraised Value (as hereafter
defined) determined by (1) an independent appraiser, who is a
member of the Appraisal Institute, and will be selected by
Landlord, (the "Landlord MAI Appraiser"), (2) a second
appraiser, who is a member of the Appraisal Institute, and will
be selected by the Tenant (the "Tenant MAI Appraiser"), and (3)
a third MAI Appraiser selected by agreement of the Landlord MAI
Appraiser and the Tenant MAI Appraiser (the "Third MAI
Appraiser") (each an "Appraiser" and, collectively, the
"Appraisers"). Landlord and Tenant shall, as promptly as
possible, but in no event later than ten (10) days following
the Option Exercise Date, select its respective Appraiser. The
Third MAI Appraiser shall be selected no later than five (5)
days after the selection of the other Appraisers. The costs of
the Appraisers' appraisals shall be shared equally by the
parties. As promptly as possible but in no event later than
fifteen (15) days after selection of the Third Appraiser, each
Appraiser shall deliver his or her written report of the
Appraisers' determination of the fair market value of the
Leased Property,
54
which determination shall be based, for each Leased Property,
upon the highest and best use of such Leased Property, taking
into consideration the location of such Leased Property and
other properties comparable thereto. The "Appraised Value" of
the Real Property shall be equal to the arithmetic mean of the
two (2) fair market value determinations of the Appraisers that
are closest in value. In the event that the values of (i) the
difference between the highest appraisal value and the next
lower appraisal value, and (ii) the difference between the
lowest appraisal value and the next higher appraisal value, are
equal, then the "Appraised Value" shall be equal to the
arithmetic mean of the fair market value determinations of all
Appraisers.
(c) Upon determination of the Property Consideration, Landlord and
Tenant agree to cooperate to close the sale and purchase of the
Leased Property entirely for cash on an " as is, where as
basis" and with no warranties by Landlord other than in a
special warranty deed, within forty-five (45) days after the
date of determination of the Property Consideration (the
"Option Closing Period"). If the sale and purchase of the
Leased Property does not close within the Option Closing Period
due to Tenant's default, Landlord shall have no further
obligations to Tenant pursuant to this Section 16.02 (a).
ARTICLE XVII
MISCELLANEOUS
17.01 Notices. Landlord and Tenant hereby agree that all notices,
demands, requests, and consents (hereinafter "Notices") required to be given
pursuant to the terms of this Lease shall be in writing and shall be addressed
as follows:
If to Tenant:
[ ]
[ ]
[ ]
[ ]
Attention:
With a copy to:
[ ]
[ ]
[ ]
55
[ ]
Attention:
If to Landlord:
Capital Automotive L.P.
[ ]
[ ]
[ ]
Attention:
With a copy to:
Xxxxxx, Xxxxxx & Xxxxxxxxx
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
and shall be served by: (a) personal delivery; (b) certified mail, return
receipt requested, postage prepaid; or (c) nationally recognized overnight
courier. All notices shall be deemed to be given upon the earlier of actual
receipt or three (3) days after mailing, or one (1) business day after deposit
with the overnight courier. Any Notices meeting the requirements of this
Section shall be effective, regardless of whether or not actually received.
Landlord or Tenant may change its notice address at any time by giving the other
party Notice of such change. Any such Notice of change of address shall be
effective five (5) days after delivery.
17.02 Advertisement of a Leased Property. In the event the
parties hereto have not executed a renewal lease, or agreed to the Extension
Term, as to the Leased Property within twelve (12) months prior to the
expiration of the Term or an Extension Term, as the case may be, then Landlord
or its agent shall have the right to enter such Leased Property at all
reasonable times for the purpose of exhibiting such Leased Property to others
and to place upon such Leased Property for and during the period commencing two-
hundred seventy (270) days prior to the expiration of the Term or an Extension
Term, as the case may be, "for sale" or "for rent" notices or signs.
17.03 Landlord's Access. Landlord, or its designated agents or
contractors, shall have the right to enter upon each Leased Property, upon
reasonable prior notice to Tenant, for purposes of inspecting the same and
assuring Tenant's compliance with this Lease provided, any such entry by
Landlord shall be subject to all rules, guidelines and procedures prescribed by
Tenant in connection therewith. Landlord shall not be allowed entry to a Leased
Property unless accompanied by such of Tenant's personnel as Tenant shall
require and which Tenant shall promptly provide.
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17.04 Entire Agreement. This Lease contains the entire agreement
between Landlord and Tenant with respect to the subject matter hereof. No
representations, warranties, and agreements have been made by Landlord or Tenant
except as set forth in this Lease.
17.05 Severability. If any term or provision of this Lease is
held by Landlord to be invalid or unenforceable as to a Leased Property, such
holding shall not affect the remainder of this Lease as to such Leased Property,
or the validity or enforceability of this Lease as to any other Leased Property,
and the same shall remain in full force and effect, unless such holding
substantially deprives Tenant of the use of such Leased Property or Landlord of
the Rents therefor, in which case this Lease shall forthwith terminate as to
such Leased Property as if by expiration of the Term or an Extension Term, as
the case may be, but shall remain in full force and effect with respect to each
other Leased Property.
17.06 Captions and Headings. The captions and headings are
inserted only as a matter of convenience and for reference and in no way define,
limit or describe the scope of this Lease or the intent of any provision hereof.
17.07 Governing Law. This Lease shall be construed under the laws
of the State of Virginia (without application of choice of law provisions).
17.08 Memorandum of Lease or Certain Rights Under the Lease.
Landlord and Tenant agree that a record of this Lease or of certain rights under
this Lease may be recorded by either party in a memorandum of lease approved by
Landlord and Tenant with respect to each Leased Property. The party recording
such memorandum must bear all costs of such recording.
17.09 Waiver. No waiver by Landlord of any condition or covenant
herein contained, or of any breach of any such condition or covenant, shall be
held or taken to be a waiver of any subsequent breach of such covenant or
condition, or to permit or excuse its continuance or any future breach thereof
or of any condition or covenant, nor shall the acceptance of Rent by Landlord at
any time when Tenant is in default in the performance or observance of any
condition or covenant herein be construed as a waiver of such default, or of
Landlord's right to terminate this Lease or exercise any other remedy granted
herein on account of such default.
17.10 Assignment; Binding Effect. Except as otherwise set forth
herein, this Lease shall not be assignable by Tenant, without the prior written
consent of Landlord. This Lease will be binding upon and inure to the benefit
of the heirs, successors, personal representatives, and permitted assigns of
Landlord and Tenant.
17.11 Consents and Approvals. In each instance in this Lease where
the Landlord is required or permitted to give a consent or approval, or to make
a determination, the Landlord's decision and any conditions thereon must be
reasonable under the circumstances. Except as provided in Sections 8.07(d) and
13.01, there shall be a presumption that each such
57
decision and any conditions thereon by Landlord was in fact reasonable, and
Tenant shall have the burden of proof in any attempt to rebut that presumption.
With respect to Sections 8.07(d) and 13.01, there shall be a presumption that
each such decision and any conditions thereon by Landlord was in fact
unreasonable, and Landlord shall have the burden of proof in any attempt to
rebut that presumption.
17.12 Single Property. Throughout the form of this Lease there are
references to "Leased Properties". If, in fact, there is only one Leased
Property being leased hereunder, all such references shall, without further
action, be deemed amended to refer solely to such Leased Property and all
provisions relating to Leased Properties, including remedies applicable to only
one Leased Property, shall likewise be amended to the extent necessary, but only
to the extent necessary, to give effect to the fact that there is only one
Leased Property.
17.13 Modification. This Lease may only be modified by a writing
signed by both Landlord and Tenant.
17.14 Incorporation by Reference. All schedules and exhibits
referred to in this Lease are incorporated herein by reference.
17.15 No Merger. As to each Leased Property, the surrender of
this Lease by Tenant or the cancellation of this Lease by agreement of Tenant
and Landlord or the termination of this Lease on account of Tenant's default
will not work a merger, and will, at Landlord's option, terminate any subleases
or operate as an assignment to Landlord of any subleases. Landlord's option
under this paragraph will be exercised by notice to Tenant and all known
subtenants of such Leased Property.
17.16 Force Majeure. Landlord, its agents and employees, will not
be liable for any loss, injury, death, or damage (including consequential
damages) to persons, property, or Tenant's Business occasioned by theft, act of
God, public enemy, injunction, riot, strike, insurrection, war, court order,
requisition, order of governmental body or authority, fire, explosion, falling
objects, steam, water, rain or snow, leak or flow of water (including water from
the elevator system), rain or snow from any Leased Property or into any Leased
Property or from the roof, street, subsurface or from any other place, or by
dampness or from the breakage, leakage, obstruction, or other defects of the
pipes, sprinklers, wires, appliances, plumbing, air conditioning, or lighting
fixtures of any Leased Property, or from construction, repair, or alteration of
any Leased Property or from any acts or omissions of any other occupant or
visitor of any Leased Property, or from the release, emission, discharge,
presence or disposal of any hazardous substance or material on or from any
Leased Property, or from any other cause beyond Landlord's control.
17.17 Laches. No delay or omission by either party hereto to
exercise any right or power accruing upon any noncompliance or default by the
other party with respect to any of the terms hereof shall impair any such right
or power or be construed to be a waiver thereof.
58
17.18 Waiver of Jury Trial. To the extent that there is any claim
by one party against the other that is not to be settled by arbitration as
provided in Article XIV hereof, Landlord and Tenant waive trial by jury in any
action, proceeding or counterclaim brought by either of them against the other
on all matters arising out of this Lease or the use and occupancy of any Leased
Property (except claims for personal injury or property damage). If Landlord
commences any summary proceeding for nonpayment of Rent, Tenant will not
interpose, and waives the right to interpose, any counterclaim in any such
proceeding.
17.19 Permitted Contests. Tenant, on its own or on Landlord's
behalf (or in Landlord's name), but at Tenant's expense, may contest, by
appropriate legal proceedings conducted in good faith and with due diligence,
the amount or validity or application, in whole or in part, of any Imposition or
any legal requirement or insurance requirement or any lien, attachment, levy,
encumbrance, charge or claim provided that: (a) in the case of an unpaid
Imposition, lien, attachment, levy, encumbrance, charge or claim, the
commencement and continuation of such proceedings shall suspend the collection
thereof from Landlord and from the subject Leased Property; (b) neither the
subject Leased Property nor any Rent therefrom nor any part thereof or interest
therein would be in any immediate danger of being sold, forfeited, attached or
lost; (c) in the case of a legal requirement, Landlord would not be in any
immediate danger of civil or criminal liability for failure to comply therewith
pending the outcome of such proceedings; (d) in the event that any such contest
shall involve a sum of money or potential loss in excess of Twenty Five Thousand
Dollars ($25,000), Tenant shall deliver to Landlord and its counsel an opinion
of Tenant's counsel to the effect set forth in clauses (a), (b) and (c), to the
extent applicable; (e) in the case of a legal requirement and/or an Imposition,
lien, encumbrance, or charge, Tenant shall give such reasonable security as may
be demanded by Landlord to insure ultimate payment of the same and to prevent
any sale or forfeiture of a subject Leased Property or the Rent in respect
thereof by reason of such nonpayment or noncompliance; provided, however, the
provisions of this Section shall not be construed to permit Tenant to contest
the payment of Rent (except as to contests concerning the method of computation
or the basis of levy of any Imposition or the basis for the assertion of any
other claim) or any other sums payable by Tenant to Landlord hereunder; (f) in
the case of an insurance requirement, the coverage required by Article IV shall
be maintained; and (g) if such contest be finally resolved against Landlord or
Tenant, Tenant shall, as Additional Rent due hereunder, promptly pay the amount
required to be paid, together with all interest and penalties accrued thereon,
or comply with the applicable legal requirement or insurance requirement.
Landlord, at Tenant's expense, shall execute and deliver to Tenant such
authorizations and other documents as may be reasonably required in any such
contest, and, if reasonably requested by Tenant or if Landlord so desires,
Landlord shall join as a party therein. Tenant hereby agrees to indemnify and
hold harmless Landlord, its officers, trustees, employees, shareholders,
affiliates and agents from and against any and all demands, claims, causes of
action, fines, penalties, damages (including punitive and consequential
damages), losses, liabilities (including strict liability), judgments, costs and
expenses (including, without limitation, attorneys' fees, court costs, and the
costs set forth in Section 9.06) that may be incurred in connection with or
arise from any such contest.
59
17.20 Construction of Lease. This Lease has been reviewed by
Landlord and Tenant and their respective professional advisors. Landlord and
Tenant believe that this Lease is the product of all their efforts, that they
express their agreement, and agree that they shall not be interpreted in favor
of either Landlord or Tenant or against either Landlord or Tenant merely because
of any party's efforts in preparing such documents.
17.21 Counterparts. This Lease may be executed in duplicate
counterparts, each of which shall be deemed an original hereof or thereof.
17.22 Relationship of Landlord and Tenant. The relationship of
Landlord and Tenant is the relationship of lessor and lessee. Landlord and
Tenant are not partners, joint venturers, or associates.
(remainder of this page left intentionally blank)
60
IN WITNESS WHEREOF, the parties hereto have executed this Lease or
caused the same to be executed by their respective duly authorized officers as
of the date first set forth above.
CAPITAL AUTOMOTIVE L.P.
By: Capital Automotive REIT,
Its General Partner
By:
Its:
[ ]
By:
Its:
61
XXXXXX LEASE AGREEMENT EXHIBITS AND SCHEDULES
SCHEDULES
A Leased Properties
B Permitted Liens
C Base Annual Rent Schedule
EXHIBITS
2.02 Payment Account Information
2.04 Base Annual Rent Adjustment
5.07 Environmental Reports
12.02 Material Agreements
12.03 Changes in Condition
15.02 Form of Subordination and Non-Disturbance Agreement
EXHIBIT A
LEASED PROPERTIES
--------------------------------------------------------------------------------
Lease Lessees and Lessees Total Annual Initial Base Properties
Rent for Leased Properties Covered by Lease
--------------------------------------------------------------------------------
1 Xxxxxx Ford, Inc. 5201 Auth Rd.
Xxxxxx Heights,
$255,840 MD 20786,
Parcel A (Tax Id.
00-0000000)
0000 Xxxx Xx.
Xxxxxx Xxxxxxx,
XX 00000,
Parcel 3
(Tax Id. 06-
0422139)
0000 Xxxx Xx.
Xxxxxx Xxxxxxx,
XX 00000,
* NOTE: The expiration date of the Initial Parcel 53
Term of this Lease shall be April 30, 2006. (Tax Id. 06-
0546739)
--------------------------------------------------------------------------------
EXHIBIT A
LEASED PROPERTIES
--------------------------------------------------------------------------------
Lease Lessees and Lessees Total Annual Initial Base Properties
Rent for Leased Properties Covered by Lease
--------------------------------------------------------------------------------
2 Xxxxxx Lincoln-Mercury, Inc. 00000 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx,
$282,252 VA 22191
(Tax Id. 029-01-000-
0038F1)
--------------------------------------------------------------------------------
EXHIBIT A
LEASED PROPERTIES
--------------------------------------------------------------------------------
Lease Lessees and Lessees Total Annual Initial Base Properties
Rent for Leased Properties Covered by Lease
--------------------------------------------------------------------------------
4 Xxxxxx Ford, Inc. 0000 Xxxxxxxxx
Xxxx., Xxxxxxxxxxxx,
x000,000 XX 00000
(Tax Id. No. 06-
0605873)
* NOTE: The expiration date of the Initial Term
of this Lease shall be October 31, 2007.
--------------------------------------------------------------------------------
EXHIBIT A
LEASED PROPERTIES
--------------------------------------------------------------------------------
Lease Lessees and Lessees Total Annual Initial Base Properties
Rent for Leased Properties Covered by Lease
--------------------------------------------------------------------------------
3 Xxxxxx Ford of Springfield, Inc. 0000 Xxxxxxxx Xx.,
Xxxxxxxxxxx, XX
$662,340 22150
(Tax Id. 090-2-01-
00-0051-A)
0000 Xxxxxxxx Xx.,
Xxxxxxxxxxx, XX
00000
(Tax Id. 090-2-01-
00-0053)
0000 Xxxxxxxx Xx.,
Xxxxxxxxxxx, XX
00000
(Tax Id. 090-2-01-
00-0054)
0000 Xxxxxxxx Xx.,
Xxxxxxxxxxx, XX
00000
(Tax Id. 090-2-01-
00-0055)
0000 Xxxxxxxx Xx.,
Xxxxxxxxxxx, XX
00000
(Tax Id. 090-2-01-
00-0057-D)
--------------------------------------------------------------------------------
EXHIBIT B
PERMITTED LIENS
To be in form and substance acceptable to Landlord and provided by Tenant
on or before the Commencement Date.
EXHIBIT C
INITIAL BASE ANNUAL RENT SCHEDULE
See Exhibit A for Initial Base Annual Rent payments due on Leased Property.
SCHEDULE 2.02
PAYMENT ACCOUNT INFORMATION
Wiring instructions for the Landlord's operating account are as follows:
FIRST UNION NATIONAL BANK OF VIRGINIA
CHARLOTTE, NC
ABA# 000000000
For Credit to: CAPITAL AUTOMOTIVE REIT, Operating Account
Account # 2050000478240
SCHEDULE 2.04
BASE ANNUAL RENT ADJUSTMENT
The Base Annual Rent shall be increased, effective as of the commencement
of the second Lease Year and as of each subsequent Lease Year by an amount equal
to the Initial Base Rent multiplied by fifty percent (50%) of the change in the
Index during the immediately preceding one (1) year period; provided, however,
that, in the event that the above-calculated adjustment is greater than two
percent (2%), such adjustment shall be equal to two percent (2%).
SCHEDULE 5.07
ENVIRONMENTAL REPORTS
To be in form and substance acceptable to Landlord and provided by Tenant
on or before the Commencement Date.
SCHEDULE 12.02
MATERIAL AGREEMENTS
To be in form and substance acceptable to Landlord and provided by Tenant
on or before the Commencement Date.
SCHEDULE 12.03
CHANGES IN CONDITION
To be in form and substance acceptable to Landlord and provided by Tenant
on or before the Commencement Date.
SCHEDULE 15.02
See attached Form of Subordination and Non-Disturbance Agreement.
SUBORDINATION AND NON-DISTURBANCE AGREEMENT
THIS AGREEMENT is made as of this ___ day of __________, 1997, among
_____________, a ___________ organized under the laws of the State of
_____________ ("Lender"), __________________ ("Tenant"), and CAPITAL AUTOMOTIVE
L.P., a Delaware limited partnership ("Landlord").
WITNESSETH:
WHEREAS, Landlord and Tenant have entered into a certain Lease, dated,
which lease and all amendments, modifications, assignments, subleases and
other agreements related thereto are attached hereto as Exhibit A and
incorporated herein by this reference (collectively, the "Lease"), which Lease
relates to the premises described therein (the "Premises"), and
WHEREAS, Lender has made or has committed to make a first mortgage loan to
Landlord in the principal amount not to exceed $_________ (the "Loan"), the Loan
being secured by a mortgage, deed of trust or security deed (collectively, the
"Mortgage") and an assignment(s) of leases and rents from Landlord to Lender
covering the Premises; and
WHEREAS, Tenant has agreed that the Lease shall be subject and subordinate
to the Mortgage held by Lender, provided Tenant is assured of continued
occupancy of the Premises under the terms of the Lease;
NOW, THEREFORE, for and in consideration of the mutual covenants herein
contained, the sum of Ten Dollars ($10.00) and other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
and notwithstanding anything in the Lease to the contrary, it is hereby agreed
as follows:
1. SUBORDINATION OF LEASE. Lender, Tenant and Landlord do hereby
covenant and agree that the Lease with all rights, options, liens and charges
created thereby, is and shall continue to be subject and subordinate in all
respects to the Mortgage and to any renewals, modifications, consolidations,
replacements and extensions thereof and to all advancements made thereunder.
2. NONDISTURBANCE OF TENANT. Lender does hereby agree with Tenant that,
in the event Lender becomes the owner of the Premises by foreclosure, conveyance
in lieu of foreclosure or otherwise, so long as Tenant complies with and
performs its obligations under the Lease, (a) Lender will take no action which
will interfere with or disturb Tenant's possession or use of the Premises or
other rights under the Lease, and (b) the Premises shall be subject to the Lease
and Lender shall recognize Tenant as the tenant of the Premises for the
remainder of the terms of the Lease in accordance with the provisions thereof,
provided, however, that Lender shall not be subject to any offsets or defenses
which Tenant might have against any prior landlord except those which arose
-1-
under the provisions of the Lease out of such landlord's default and accrued
after Tenant had notified Lender and given Lender the opportunity to cure same
as hereinbelow provided, nor shall Lender be liable for any act or omission of
any prior landlord, nor shall Lender be bound by any rent or additional rent
which Tenant might have paid for more than the current month to any prior
landlord nor shall it be bound by any amendment or modification of the Lease
made without its consent.
3. ATTORNMENT BY TENANT. Tenant does hereby agree with Lender that, in
the event Lender becomes the owner of the Premises by foreclosure, conveyance in
lieu of foreclosure or otherwise, then Tenant shall attorn to and recognize
Lender as the landlord under the Lease for the remainder of the term thereof,
and Tenant shall perform and observe its obligations thereunder, subject only to
the terms and conditions of the Lease. In such event, Lender shall not be
liable for any act or omission of any prior landlord, liable for return of the
security deposit unless same was actually delivered to Lender, bound by any
amendment to or assignment of the Lease made without its consent, bound by any
rent paid more than thirty (30) days in advance, or be subject to any set-off or
defense Tenant might have had against any prior landlord. Tenant further
covenants and agrees to execute and deliver upon request of Lender or its
assigns, an appropriate Agreement of Attornment to Lender and any subsequent
titleholder of the Premises.
4. ACKNOWLEDGMENT OF ACQUISITION RIGHTS. Lender acknowledges that Tenant
has certain purchase rights under the lease. So long as Tenant complies with
the provisions of the Lease, Lender acknowledges that Tenant may exercise such
rights and Lender will honor such rights so long as Tenant pays the acquisition
price to Lender or otherwise obtains a release from Lender.
5. CURATIVE RIGHTS, MODIFICATION OF LEASE, AND ADVANCE PAYMENT OF RENT.
So long as the Mortgage remains outstanding and unsatisfied:
(a) Tenant will mail or deliver to Lender, at the address and in the
manner hereinbelow provided, a copy of all notices permitted or required to be
given to the Landlord by Tenant under and pursuant to the terms and provisions
of the Lease. At any time before the rights of the Landlord shall have been
forfeited or adversely affected because of any default of the Landlord, or
within the time permitted the Landlord for curing any default under the Lease as
therein provided, Lender may, but shall have no obligation to, pay any taxes and
assessments, make any repairs and improvements, make any deposits or do any
other act or thing required of the Landlord by the terms of the Lease; and all
payments so made and all things so done and performed by Lender shall be as
effective to prevent the rights of the Landlord from being forfeited or
adversely affected because of any default under the Lease as the same would have
been if done and performed by the Landlord.
(b) Tenant will not consent to the modification of the Lease, nor to the
termination thereof, without the prior written consent of Lender, such consent
not to be unreasonably withheld or delayed, nor will Tenant pay any rent under
the Lease more than thirty (30) days in advance.
6. CONSENT TO ASSIGNMENT. Tenant acknowledges that Landlord will execute
and deliver to Lender an assignment of the Lease as security for the Loan, and
Tenant hereby expressly
-2-
consents to such assignment.
7. LIMITATION OF LIABILITY. Lender shall have no liability whatsoever
hereunder prior to becoming the owner of the Premises; and Tenant agrees that if
Lender becomes the owner of the Premises, Tenant shall look solely to the estate
or interest of Lender in the Premises for satisfaction of any obligation which
may be or become owing by Lender to Tenant hereunder or under the Lease.
8. LANDLORD AND TENANT CERTIFICATIONS. Landlord and Tenant hereby
certify to Lender that the Lease has been duly executed by Landlord and Tenant
and is in full force and effect, that the Lease and any modifications and
amendments specified herein are a complete statement of the agreement between
Landlord and Tenant with respect to the leasing of the Premises, and the Lease
has not been modified or amended except as specified herein; that to the
knowledge of Landlord and Tenant, no party to the Lease is in default
thereunder; that no rent under the Lease has been paid more than thirty (30)
days in advance of its due date; and that Tenant, as of this date, has no
charge, lien or claim of offset under the Lease, or otherwise, against the rents
or other charges due or to become due thereunder.
9. TENANT ESTOPPEL CERTIFICATIONS. With the knowledge that Lender,
as beneficiary of the mortgage encumbering the premises, will place substantial
reliance thereon in connection with the closing and funding of the Loan, Tenant
hereby makes the following certifications:
(a) The term of the Lease commenced on ________, 19__, and will
terminate on ______________.
(b) The Lease, as described above, has not been modified, amended,
assigned or subleased except as set forth in Exhibit A attached hereto, and is
in good standing and in full force and effect.
(c) The Lease provides for rental payments over the term of the Lease,
all as specifically provided in the Lease. No rent under the Lease has been
paid more than thirty (30) days in advance of the due date of same. For the
year ____, monthly payments, which are due on the first (1st) day of each month,
are as follows:
Basic Rent - $________
Payment of the above amount was timely made for the months of ______,
___and _____, ____, and the next payment of the above amount will be due on
________, ____. In addition to the above amount, certain additional sums are
due to Landlord from Tenant under the Lease, all as specifically set forth in
the Lease.
-3-
(d) Tenant has paid a security deposit under the Lease.
(e) To Tenant's knowledge there are no defaults by Landlord under the
Lease and there are no existing circumstances which, with the passage of time,
or notice, or both, would give rise to a default under the Lease.
(f) Tenant has accepted and is occupying the Premises, and Landlord
has no unperformed obligation under the Lease to construct any improvements for
the Tenant related to the Premises.
(g) Tenant has no charge, lien, claim of set-off or defense against
rents or other charges due or to become due under the Lease or otherwise under
any of the terms, conditions, or covenants contained therein.
(h) Tenant has received no notice from any insurance company of any
defects or inadequacies in the Premises or in any part thereof which would
adversely affect the insurability of the Premises.
(i) Except as provided in the Lease, Tenant does not have any right or
option to purchase the Premises.
(j) Except as provided in the Lease, Tenant does not have any rights
or options to renew the Lease or to lease additional space in any building owned
by the Landlord.
10. TENANT COVENANTS.
(a) From and after the date hereof, Tenant will not pay any rent under
the Lease more than thirty (30) days in advance of its due date.
(b) From and after the date hereof, so long as there shall be any
assignment of Landlord's interest in the Lease to Lender, or any successor
thereto, Tenant will not: consent to the modification of the Lease nor to the
termination thereof without the prior written consent of the Lender or any
successor holder of the Loan or the Mortgage which consent shall not be
unreasonably withheld or delayed (either of them being called "Mortgagee"), nor
seek to terminate the Lease by reason of any act or omission of Landlord until
Tenant shall have given written notice of such act or omission to such
Mortgagee's last address furnished Tenant) and until a reasonable period of time
shall have elapsed following the giving of such notice, during which period the
Mortgagee shall have the right, but not the obligation, to remedy such act or
omission.
-4-
(c) Upon written notice of the default by Landlord under any of the
loan documents held by Mortgagee and assignment of the Landlord's interest under
the Lease by Landlord to Mortgagee, Tenant, if Mortgagee so requests, will
recognize such Mortgagee as the Landlord under the Lease and will thereafter pay
rent and other sums to Mortgagee (or to the party designated by the Mortgagee in
writing) in accordance with the terms of the Lease, and, in such event, such
Mortgagee will not be liable for any act or omission of any prior lessor, liable
for return of the security deposit unless same was actually delivered to
Mortgagee, bound by any amendment to or assignment of the Lease made without its
consent, bound by any rent paid more than thirty (30) days in advance, or be
subject to any set-off or defense Tenant might have had against any prior
lessor.
11. NOTICES. Unless and except as otherwise specifically provided
herein, any and all notices, elections, approvals, consents, demands, requests
and responses thereto ("Communications") permitted or required to be given under
this Agreement shall be in writing, signed by or on behalf of the party giving
the same, and shall be deemed to have been properly given and shall be effective
upon the earlier of receipt thereof or three (3) days after deposit thereof in
the United States mail, postage prepaid, certified with return receipt
requested, to the other party at the address of such other party set forth
hereinbelow or at such other address within the continental United States as
such other party may designate by notice specifically designated as a notice of
change of address and given in accordance herewith; provided, however, that the
time period in which a response to any Communication must be given shall
commence on the date of receipt thereof, and provided further that no notice of
change of address shall be effective with respect to Communications sent prior
to the time of receipt of such change. Receipt of Communications hereunder
shall occur upon actual delivery (whether by mail, facsimile transmission,
messenger, courier service, or otherwise) to an individual party or to an
officer, member, or general or limited partner of a party or to any agent or
employee of such party at the address of such party set forth hereinbelow,
subject to change as provided hereinabove. An attempted delivery in accordance
with the foregoing, acceptance of which is refused or rejected, shall be deemed
to be and shall constitute receipt; and an attempted delivery in accordance with
the foregoing by mail, messenger, or courier service (whichever is chosen by the
sender) which is not completed because of changed address of which no notice was
received by the sender in accordance with this provision prior to the sending of
the Communication shall also be deemed to be and constitute receipt. Any
Communication, if given to Lender, must be addressed as follows, subject to
change as provided hereinabove:
---------------------------
---------------------------
and, if given to Tenant, must be addressed as follows, subject to change as
provided hereinabove:
---------------------------
---------------------------
---------------------------
-5-
and, if given to Landlord, must be addressed as follows, subject to change as
provided hereinabove:
Capital Automotive, L.P.
---------------------------
---------------------------
12. MISCELLANEOUS. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, legal
representatives, successors, successors-in-title and assigns. When used herein,
the term "Landlord" or "landlord" refers to Landlord and to any successor to the
interest of Landlord under the Lease.
[THIS SPACE INTENTIONALLY LEFT BLANK]
-6-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the date first above written.
LENDER:
Signed, sealed and delivered
in the presence of: By:
Title:
_______________________________ ___________________________
Witness (CORPORATE SEAL)
TENANT:
Signed, sealed and delivered
in the presence of: By:
Title:
_______________________________ ___________________________
Witness (CORPORATE SEAL)
LANDLORD:
Signed, sealed and delivered
in the presence of: By:
Title:
_______________________________ ___________________________
Witness (PARTNERSHIP SEAL)
-7-
EXHIBIT A
Lease Dated __________ from ________________ to _______________ with Exhibit A
attached, all in the form attached hereto as Attachment to Exhibit A.
-8-
County of ______________________:
SS:
State of _______________________:
This is to certify that on this ____ day of ________, 1997, personally
appeared before me, a notary public of the County (City) aforesaid, known to me
(or satisfactorily identified to me) to be the individual signing on behalf of
Lender in the capacity stated by his signature, and that he acknowledged the
within document to be the act and deed of the Lender.
_______________________________
Notary Public
My commission expires:
-9-
County of ______________________:
SS:
State of _______________________:
This is to certify that on this ____ day of _________, 1997,
personally appeared before me, a notary public of the County (City) aforesaid,
known to me (or satisfactorily identified to me) to be the individual signing on
behalf of Tenant in the capacity stated by his signature, and that he
acknowledged the within document to be the act and deed of the Tenant.
______________________________
Notary Public
My commission expires:
-10-
County of ______________________:
SS:
State of _______________________:
This is to certify that on this ____ day of _______, 1997, personally
appeared before me, a notary public of the County (City) aforesaid, known to me
(or satisfactorily identified to me) to be the individual signing on behalf of
Landlord in the capacity stated by his signature, and that he acknowledged the
within document to be the act and deed of the Landlord.
______________________________
Notary Public
My commission expires:
-11-
EXHIBIT 4.4(C)
GUARANTY AND SUBORDINATION AGREEMENT
THIS GUARANTY AND SUBORDINATION AGREEMENT (this "Agreement"), made as
of the ______ day of _________, 19__, by ______________ , a _______________
corporation ("Guarantor"), in favor of Capital Automotive, L.P., a Delaware
limited partnership ("Landlord").
WITNESSETH:
WHEREAS, Landlord has this day entered into a lease (the "Lease") of
certain Properties identified on Schedule A hereto (individually a "Property"
and collectively the "Properties") with ____________, a ________________
corporation ("Tenant"), this Agreement being attached to the Lease;
WHEREAS, Tenant is a subsidiary [affilate] of Guarantor; and
WHEREAS, Landlord has required, as a condition to entering into the
Lease, Guarantor to be a guarantor of each and every obligation imposed upon
Tenant by the Lease.
NOW, THEREFORE, to induce Landlord to enter into the Lease and in
consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Guarantor, for itself, its successors and assigns, hereby covenants and agrees
for the benefit of Landlord, as follows:
1. Guaranty. Guarantor does hereby unconditionally and irrevocably
guarantee to Landlord the full, complete and timely performance of all
obligations imposed on Tenant by the terms of the Lease, including, but not
limited to, the full, complete and timely payment of rent and all other sums due
by Tenant under the Lease, and the payment as required by the Lease of all
damages to Landlord which may result from Tenant's breach of any provision of
the Lease, including, but not limited to, those relating to damage to any
Property or the leased premises.
2. Guaranty of Payment and Performance. Guarantor acknowledges and
agrees that this is a guaranty of payment and performance and not mere
collection. The liability of Guarantor under this Agreement shall be direct and
immediate and not conditional or contingent upon the pursuit of any remedies
against Tenant or any other person or entity. Guarantor waives any right to
require that an action be brought against Tenant or any other person or entity.
In the event, on account of the Bankruptcy Reform Act of 1978, as amended, or
any other debtor relief law (whether statutory, common law, case law or
otherwise) of any jurisdiction whatsoever, now or hereafter in effect, which may
be or become applicable, Tenant
-1-
shall be relieved of the Lease or any debt, obligation or liability as provided
in the Lease, Guarantor shall nevertheless be fully liable for the complete and
timely performance of all obligations imposed on Tenant by the Lease throughout
the entire term of the Lease, all to the same extent as if Guarantor had been
the original tenant thereunder and the Lease shall be deemed unaffected by any
such relief granted to Tenant. In the event of a default under the Lease which
is not cured within any applicable grace or cure period, Landlord shall have the
right to enforce its rights, powers and remedies thereunder or hereunder, in any
order to the maximum extent permitted by law, and all rights, powers and
remedies provided thereunder or hereunder or by law or in equity. If the
obligations guaranteed hereby are partially performed, paid or discharged by
reason of the exercise of any of the remedies available to Landlord, this
Agreement shall nevertheless remain in full force and effect, and Guarantor
shall continue to be liable for all remaining obligations guaranteed hereby,
even though any rights which Guarantor may have against Tenant may be destroyed
or dismissed by the exercise of any such remedy.
3. Waivers by Guarantor. To the extent permitted by law, Guarantor
hereby waives and agrees not to assert or take advantage of:
(a) Any right to require Landlord to proceed against Tenant or
any other person or entity or to proceed against or exhaust any security held by
Landlord at any time or to pursue any other remedy in Landlord's power or under
any other agreement before proceeding against Guarantor;
(b) Any defense that may arise by reason of the incapacity, lack
of authority, death or disability of any other person or persons or the failure
of Landlord to file or enforce a claim against the estate (in administration,
bankruptcy or any other proceeding) of any other person or persons:
(c) Any defense based upon an election of remedies by Landlord;
(d) Any right or claim or right to cause a marshaling of the
assets of Tenant or Guarantor;
(e) Any invalidity, irregularity or unenforceability, in whole or
in part, of any one or more provisions of the Lease;
(f) Any modification of the Lease or of any obligation of Tenant
thereunder by amendments to the Lease, by waivers granted by Landlord or by
operation of law or by action of any court, whether pursuant to the Bankruptcy
Reform Act of 1978, as amended, or any other debtor relief law (whether
statutory, common law, case law or otherwise) of any jurisdiction whatsoever,
now or hereafter in effect, or otherwise.
4. Subordination. Guarantor and those parties signing below for the
purpose of being bound by this Section 4 (collectively, "Section 4 Signers)
hereby unconditionally and
-2-
irrevocably subordinate (i) all payments due or to become due by Tenant to the
Section 4 Signers, or any of them, by reason of any and all debts or other
obligations, including the obligation to pay salaries or other compensation
(collectively "Debt Payments") and (ii) the receipt of all dividends or other
distributions of any kind or nature (collectively, "Distributions") to the
payment of all sums due or to become due by Tenant to Landlord under the Lease,
including the payment of Rent and all damages due by reason of Tenant's breach
of the Lease; provided, however, that for so long as there shall be no existing
Event of Default under the Lease, after the payment of each monthly installment
of Rent, the Section 4 Signers shall be entitled to receive Debt Payments due
for such month.
5. General Provisions.
(a) Survival. This Agreement shall be deemed to be continuing in
nature and shall remain in full force and effect and shall survive the exercise
of any remedy by Landlord under the Lease;
(b) No Subrogation; No Recourse Against Landlord. Notwithstanding
the satisfaction by Guarantor of any liability hereunder, Guarantor's rights of
subrogation, contribution, reimbursement or indemnity, if any, or any right of
recourse to or with respect to the assets or property of Tenant, shall be
subject and subordinate to the rights of Landlord. Guarantor expressly agrees
not to exercise any and all rights of subrogation against Landlord.
(c) Entire Agreement; Amendment; Severability. This Agreement
contains the entire agreement between the parties respecting the matters herein
set forth and supersedes all prior agreements, whether written or oral, between
the parties respecting such matters. Any amendments or modifications hereto, in
order to be effective, shall be in writing and executed by Landlord and
Guarantor. A determination that any provision of this Agreement is
unenforceable or invalid shall not affect the enforceability or validity of any
other provision, and any determination that the application of any provision of
this Agreement to any person or circumstance is illegal or unenforceable shall
not affect the enforceability or validity of such provision as it may apply to
any other persons or circumstances.
(d) Governing Law: Binding Effect; Waiver of Acceptance. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Virginia without regard to conflicts of laws principles thereof. This
Agreement shall bind Guarantor, it successors and assigns (but in the event of
an assignment, Guarantor shall not be relieved of its obligations hereunder),
and shall inure to the benefit of Landlord, its successors and assigns.
Guarantor hereby waives any acceptance of this Agreement by Landlord and this
Agreement shall immediately be binding upon Guarantor.
(e) Notice. All notices, demands, requests or other
communications to be sent by one party to the other hereunder or required by law
shall be in writing and shall be deemed to have been validly given or served by
delivery of the same in person to the intended
-3-
addressee, or certified mail or by depositing the same with Federal Express or
another reputable private courier service for next business day delivery to the
intended addressee at its address set forth in the last section of this
Agreement or at such other address as may be designated by such party as herein
provided. All notices, demands and requests shall be effective upon such
personal delivery, or one (1) business day after being deposited with the
private courier service, or two (2) business days after being deposited in the
United States mail as required above. Rejection or other refusal to accept or
the inability to deliver because of changed address of which no notice was given
as herein required shall be deemed to be receipt of the notice, demand or
request sent. By giving to the other party hereto at least seven (7) days' prior
written notice thereof in accordance with the provisions hereof, each party
shall have the right from time to time to change their respective addresses and
each shall have the right to specify as its address any other address within the
United States of America.
(f) No Waiver; Time of Essence. The failure of either party to
enforce any of the respective rights or remedies hereunder, or to promptly
enforce any such rights or remedies, shall not constitute a waiver thereof nor
give rise to any estoppel against such party nor excuse any of the parties
hereto from their respective obligations hereunder. Any waiver of such right or
remedy must be in writing and signed by the party to be bound and must expressly
state that such right or remedy has been or thereby is waived. This Agreement
is subject to enforcement at law or in equity, including actions for damages or
specific performance. Time is of the essence hereof.
(g) Captions for Convenience. The captions and headings of the
section and paragraphs of this Agreement are for convenience of reference only
and shall not be construed in interpreting the provisions hereof.
(h) Attorney's Fees. In the event it is necessary for Landlord to
retain the services of an attorney or any other consultants in order to enforce
this Agreement, or any portion hereof, Guarantor shall promptly pay to Landlord
any and all costs and expenses, including, without limitation, attorney's fees,
incurred by Landlord as a result thereof and such costs, fees and expenses shall
be included in the costs of the case to the extent the Landlord wins the issue
under contest.
(i) Successive Actions. Separate and successive actions may be
brought hereunder to enforce any of the provisions hereof at any time and from
time to time. No action hereunder shall preclude any subsequent action, and
Guarantor hereby waives any covenants to the maximum extent permitted by law not
to assert any defense in the nature of splitting of causes of action or merger
of judgments.
(j) Reliance. Landlord would not enter into the Lease without
this Agreement. Accordingly, Guarantor intentionally, irrevocably and
unconditionally enters into the covenants and agreements as set forth above and
understand that, in reliance upon and in consideration of such covenants and
agreements, the Lease has been made.
-4-
4. Notices: The following addresses shall be used for notice
purposes:
If to Landlord:
__________________________
__________________________
__________________________
With copies to:
_________________________
_________________________
_________________________
_________________________
_________________________
_________________________
IN WITNESS WHEREOF, Guarantor has executed this Agreement under seal
as of the day and year first above written:
GUARANTOR:
ATTEST/WITNESS: ________________________________
_______________________________ By: ____________________________
Name: _________________________ Name: __________________________
Title: __________________________ Title: ___________________________
-5-
EXHIBIT 7.2.1(I)
INVESTOR QUESTIONNAIRES
CAPITAL AUTOMOTIVE L.P.
UNITS OF LIMITED PARTNERSHIP INTEREST
CONFIDENTIAL PURCHASER QUESTIONNAIRE
(NATURAL PERSONS)
Capital Automotive L.P.
0000 Xxxxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
The information contained in this Investor Questionnaire is being
furnished in order to determine whether the undersigned is accredited to
purchase units of limited partnership interest (the "Units") of Capital
Automotive L.P. (the "Partnership") pursuant to the Agreement of Contribution
of Interests dated November __, 1997 (the "Contribution Agreement"), by and
among the persons and entities named on Schedule I hereto consisting of all of
the owners of an interest in any of the Properties (as hereafter defined) (each
individually, a "Purchaser" and collectively, the "Purchasers"), and Capital
Automotive REIT, a Maryland real estate investment trust (the "Company"), and
the Partnership.
ALL INFORMATION CONTAINED IN THIS INVESTOR QUESTIONNAIRE WILL BE
TREATED CONFIDENTIALLY. Any offer or sale to any Purchaser will be made by the
Partnership. You understand, however, that the Company may be required to
present this Investor Questionnaire to such parties as it deems appropriate if
called upon to establish that the proposed offer and sale of the Units are
exempt from registration under the Securities Act of 1933, as amended (the
"Securities Act"), or applicable state securities or blue sky laws or if
otherwise required. Further, the undersigned understands that the offering and
sale of the Units may be required to be reported to the Securities and Exchange
Commission and reported or registered under applicable state securities or blue
sky laws.
Name(s) of Purchaser(s):/1/
(1)__________________________________________
--------------------
/1/ If there is more than one Purchaser (other than husband and wife), a
separate Confidential Purchaser Questionnaire must be completed for each such
Purchaser and attached to this Confidential Purchaser Questionnaire.
(2)__________________________________________
1. Background Information.
a. Home Address:___________________________________________________________
___________________________________________________________
b. Home Telephone:_______________________________________________________
c. Social Security #s:___________________________________________________
d. U.S. Citizen: ___________ Yes ________ No
e. Occupation:___________________________________________________________
f. Employer:_____________________________________________________________
g. Bus. Address:_________________________________________________________
h. Bus. Telephone:_______________________________________________________
i. Age:__________________________________________________________________
j. Send Mail to: _______ Home _______ Office
Other: __________________________________________
k. State your education and degrees earned:
Degree School Year
___________________________________________________________________________
___________________________________________________________________________
l. Do you currently own securities or other types of investments?
_________
_________________________________________________________
m. Do you have means of providing for your needs and personal
contingencies?
_________________________________________________________
n. Do you have a preexisting business relationship with the person who
contacted you in connection with the offering of the Units?
_________________________________________________________
2. Type of Ownership.
Indicate type of ownership you intend to subscribe for (if other than for a
single individual):
______ Individual
______ Joint Tenants with Rights of Survivorship
______ Tenants in Common
______ Tenants by the Entirety
3. Purchaser Suitability.
Please indicate whichever of the following (if any) certifications apply to
you by initialing the appropriate space:
(i) I certify that I am an "accredited investor" because I have an
individual net worth/2/ (or joint net worth with my spouse) in excess of
$1,000,000.
Yes ____ No ____
(ii) I certify that I am "accredited investor" because I had an
individual income (not including any amounts attributable to my spouse or
to property owned by my spouse) of more than $200,000 in each of the
previous two calendar years and I reasonably expect to reach the same
income level in the current year.
Yes ____ No ____
------------------
/2/ For purposes of this Questionnaire, a purchaser's "net worth" is equal
to the excess of total assets at fair market value over total liabilities.
Net worth may include the equity value (i.e., current appraised value less
mortgage indebtedness) of real property owned by the Purchaser.
(iii) I certify that I am an "accredited investor" because I had a
joint income with my spouse in excess of $300,000 in each of the previous
two calendar years and I reasonably expect to reach the same income level
in the current year.
Yes ____ No ____
4. The Purchaser hereby acknowledges and represents and warrants that:
1. (a) He/she has read and understands the risks associated with an
investment in the Units and understands those risks, (b) the information
contained in this Investor Questionnaire is true, complete and accurate as of
the date hereof, and (c) he/she will contact Capital Automotive REIT immediately
if any material change in any of this information occurs.
2. The Units will be acquired for the Purchaser's own account for
investment, and not for distribution or resale to others. The Purchaser agrees
that it will not sell or otherwise transfer the Units unless any third party
consents as required are first obtained and unless the securities are registered
under the Securities Act, and under applicable state securities laws or unless
an exemption from such registration is available. There is no market for the
Units and none is expected to develop.
3. All documents, records and books pertaining to this investment
have been made available to the Purchaser and his/her respective attorney,
accountant or investment representative; the Partnership has provided answers to
all of his/her or their questions concerning the offering and an investment in
the Partnership; and the books and records of the Partnership will be available
upon reasonable notice for inspection during normal business hours of the
Partnership at the Partnership's principal place of business.
4. The Purchaser has such knowledge and experience in financial and
business matters in general and in particular with respect to this type of
investment that it is, he/she is capable of evaluating the merits and risks of
an investment in the Partnership, and will be able to bear the financial risks
of this investment for an indefinite period of time.
5. The Purchaser has discussed with his/her investment
representative, lawyer, accountant or tax advisor, as applicable, the
suitability of an investment in the Partnership for its particular tax and
financial situation.
6. The Purchaser is acquiring the Units without being furnished any
offering.
7. The Purchaser has kept confidential all information furnished to
them by or on behalf of the Partnership and has not provided the same to anyone
other than their agents
(including counsel and accountants) on a need to know basis.
5. Reliance by Partnership.
I understand that the Partnership will be relying on the accuracy and
completeness of my responses to the foregoing questions and I
represent, warrant and covenant to the Partnership as follows:
1. I/We certify under the penalties of perjury that the social
security number provided below and information provided with respect to Section
3406(a)(1)(C) of the Internal Revenue Code is true, correct and complete; and
2. The answers to the above questions are complete and correct and
may be relied upon by the Partnership in determining whether the offering in
connection with which I have executed this Questionnaire is exempt from
registration under the Securities Act and applicable state securities laws; and
hereby agree to indemnify the Partnership and its partners, affiliates, agents,
employees and control persons, and hold each of them harmless against any and
all loss, damages, liability or expense, including reasonable attorney's fees,
which they or any of them may suffer, sustain or incur by reason of or in
connection with any misrepresentation or breach of warranty or agreement made by
the undersigned under this Investor Questionnaire or in connection with the sale
or distribution by the undersigned of the Units purchased by the undersigned
pursuant hereto in violation of the Securities Act or any other applicable law.
__________________________________________________
(please print the exact name(s) and title in which
the Units should be issued)
(Signature of Purchaser)
__________________________________________
(Name Typed or Printed)
__________________________________________
(Date)
__________________________________________
(Signature of Co-Purchaser)
__________________________________________
(Name Typed or Printed)
__________________________________________
CAPITAL AUTOMOTIVE L.P.
UNITS OF LIMITED PARTNERSHIP INTEREST
CONFIDENTIAL PURCHASER QUESTIONNAIRE
(ENTITIES)
Capital Automotive L.P.
0000 Xxxxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
The information contained in this Investor Questionnaire is being
furnished in order to determine whether the undersigned is accredited to
purchase units of limited partnership interest (the "Units") of Capital
Automotive L.P. (the "Partnership") pursuant to the Agreement of Contribution
of Interests dated November __, 1997 (the "Contribution Agreement"), by and
among the persons and entities named on Schedule I hereto consisting of all of
the owners of an interest in any of the Properties (as hereafter defined) (each
individually, a "Purchaser" and collectively, the "Purchasers"), and Capital
Automotive REIT, a Maryland real estate investment trust (the "Company"), and
the Partnership.
ALL INFORMATION CONTAINED IN THIS INVESTOR QUESTIONNAIRE WILL BE
TREATED CONFIDENTIALLY. Any offer or sale to any Purchaser will be made by the
Partnership. You understand, however, that the Company may be required to
present this Investor Questionnaire to such parties as it deems appropriate if
called upon to establish that the proposed offer and sale of the Units are
exempt from registration under the Securities Act of 1933, as amended (the
"Securities Act"), or applicable state securities or blue sky laws or if
otherwise required. Further, the undersigned understands that the offering and
sale of the Units may be required to be reported to the Securities and Exchange
Commission and reported or registered under applicable state securities or blue
sky laws.
1. Background Information.
a. Name of Investing Entity:_____________________________
b. Address: _____________________________
_____________________________
Address for correspondence (if different):
_____________________________
_____________________________
_____________________________
c. Telephone Number: _____________________________
d. Description of Business: _____________________________
_____________________________
e. Federal Tax ID Number: _____________________________
f. Individual(s) authorized to execute documents on behalf of the
entity in connection with this investment:
Name: _____________________________
Position or title: _____________________________
NOTE: In the case of a partnership or trust, a power of
attorney is required if such entity's Partnership Agreement
or Trust Agreement does not specifically authorize the
above-named individual(s) to make this investment for such
Partnership or Trust. In the case of a corporate investor,
corporate resolutions (or other evidence of corporate
authority) authorizing this investment and specifying the
individuals authorized to execute investment documents on
behalf of the corporation are required to be delivered
herewith.
2. Type of Entity: Corporation ______
Limited Partnership ______
General Partnership ______
Limited Liability Company
Revocable Trust/3/ ______
------------------
/3/ UNLESS (i) the Trust has total assets in excess of $5,000,000; (ii) the
Trust was not formed for the specific purpose of acquiring the Interest; and
(iii) the purchase by the Trust is directed by a person who has such knowledge
and experience in financial and business matters that he/she is capable of
evaluating the merits and risks of an investment in the Units, the grantor(s) of
the Trust also must provide a completed individual investor questionnaire
(continued...)
Irrevocable Trust ______
Pension or Profit
Sharing Plan or Trust
(indicate type of Plan
or Trust) ______
Individual Retirement
Account (Note: The
beneficiary of an
Individual Retirement
Account also must provide
a complete individual
investor questionnaire) ______
a. Place of Organization:
____________________________________________
b. Date of Organization:
_____________________________________________
c. Was the entity organized for the specific purpose of investing in
Capital Automotive L.P.?
Yes _____ No _____
d. Does the entity have a preexisting business relationship with the
person who contacted it in connection with the offering of the
Units?
Yes _____ No _____
e. Number of equity owners (Note: an "equity owner" for the purposes
of this Questionnaire means (1) stockholders in the case of a
corporation, (2) limited partners only in the case of a limited
partnership, (3) general partners in the case of a general
partnership, (4) grantor(s) in the case of a trust revocable at
the sole option of grantor(s) or (5) beneficiaries in the case of
other trusts): _______
3. Accredited Investors.
-------------------
/3/ (...continued)
for each grantor.
All Purchasers will be required to represent that they meet at
least one of the following requirements. Please indicate which of
the following you meet:
(i) All of the equity owners of the entity meet either (1), (2)
or (3) below:
(1) have an individual net worth/4/ (or joint net worth
with spouse) in excess of $1,000,000;
(2) had an individual income (not including any amounts
attributable to spouse or to property owned by
spouse) of more than $200,000 in each of the
previous two calendar years and a reasonable
expectation to reach the same income level in the
current year; or
(3) had a joint income with spouse in excess of
$300,000 in each of the previous two calendar years
and a reasonable expectation to reach the same
income level in the current year.
Yes ____ No _____
(ii) The Purchaser is any of the following entities (please
indicate which by initialing the appropriate line(s)):
(1) ___ A bank is defined in Section 3(a)(2) of the
Securities Act or a savings and loan
association or other institution defined in
Section 3(a)(5)(A) of the Securities Act
whether acting in its individual or fiduciary
capacity.
(2) ___ A broker/dealer registered pursuant to Section
15 of the Securities Exchange Act of 0000 (xxx
"Xxxxxxxx Xxx").
(3) ___ An insurance company as defined in Section
2(13) of the Securities Act.
------------------
/4/ For purposes of this Questionnaire, a purchaser's "net worth" is equal to
the excess of total assets at fair market value over total liabilities
(excluding home and home furnishings).
(4) ___ An investment company registered under the
Investment Company Act of 1940 or a business
development company as defined in Section
(2)(a)(48) of that Act.
(5) ___ Small Business Investment Company licensed by
the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business
Investment Act of 1958.
(6) ___ A plan established and maintained by a state,
its political subdivisions, or any agency or
instrumentality thereof, for the benefits of
its employees, if such plan has total assets in
excess of $5,000,000.
(7) ___ An employee benefit plan within the meaning of
the Employee Retirement Income Security Act of
1974 "ERISA"), if the investment decision is
made a plan fiduciary, as defined in Section
3(21) of ERISA, which is either a bank, savings
and loan association, insurance company, or
registered investment adviser, or if the
employee benefit plan has total assets in
excess of $5,000,000 or, if a self-directed
plan, with investment decisions made solely by
persons that are accredited investors.
(8) ___ A private business development company as
defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
(9) ___ An organization described in Section 501(c)(3)
of the Internal Revenue Code of 1986, as
amended (the "Code"), a corporation,
Massachusetts or similar business trust or
partnership not formed for the specific purpose
of acquiring the Units with total assets in
excess of $5,000,000.
(10)___ A trust with total assets in excess of
$5,000,000 not formed for the specific purpose
of acquiring the whose purchase is directed by
a sophisticated person as described in Rule
506(b)(2)(ii) under the Securities Act.
4. Additional Information
a. If for a Trust:
A Trust must attach a copy of its Declaration of Trust or other
governing instrument, as amended, as well as all other documents
that authorize the Trust to invest in the Units. All
documentation must be complete and correct.
b. If for a Retirement Plan:
The Retirement Plan must attach copies of all documents governing
the Plan as well as all other documents authorizing the
Retirement Plan to invest in the Units. Include, as necessary,
documents defining permitted investments by the Retirement Plan
and demonstrating the authority of the signing individual to act
on behalf of the Plan. All documentation must be complete and
correct.
5. The Purchaser hereby acknowledges and represents and warrants that:
1. (a) He/she/it has read and understands the risks associated with
an investment in the Units and understands those risks, (b) the information
contained in this Investor Questionnaire is true, complete and accurate as of
the date hereof, and (c) he/she will contact Capital Automotive REIT immediately
if any material change in any of this information occurs.
2. The Units will be acquired for the Purchaser's own account for
investment, and not for distribution or resale to others. The Purchaser agrees
that it will not sell or otherwise transfer the Units unless any third party
consents as required are first obtained and unless the securities are registered
under the Securities Act, and under applicable state securities laws or unless
an exemption from such registration is available. There is no market for the
Units and none is expected to develop.
3. All documents, records and books pertaining to this investment
have been made available to the Purchaser and his/her/it respective attorney,
accountant or investment representative; the Partnership has provided answers to
all of his/her or their questions concerning the offering and an investment in
the Partnership; and the books and records of the Partnership will be available
upon reasonable notice for inspection during normal business hours of the
Partnership at the Partnership's principal place of business.
4. The Purchaser has such knowledge and experience in financial and
business matters in general and in particular with respect to this type of
investment that it is, he/she is capable of evaluating the merits and risks of
an investment in the Partnership, and will
be able to bear the financial risks of this investment for an indefinite period
of time.
5. The Purchaser has discussed with his/her investment
representative, lawyer, accountant or tax advisor, as applicable, the
suitability of an investment in the Partnership for its particular tax and
financial situation.
6. The Purchaser is acquiring the Units without being furnished any
offering.
7. The Purchaser has kept confidential all information furnished to
them by or on behalf of the Partnership and has not provided the same to anyone
other than their agents (including counsel and accountants) on a need to know
basis.
6. Reliance by Partnership.
I understand that the Partnership will be relying on the accuracy and
completeness of my responses to the foregoing questions and I
represent, warrant and covenant to the Partnership as follows:
1. I/We certify under the penalties of perjury that the social
security number provided below and information provided with respect to Section
3406(a)(1)(C) of the Internal Revenue Code is true, correct and complete;
2. The answers to the above questions are complete and correct and
may be relied upon by the Partnership in determining whether the offering in
connection with which I have executed this Questionnaire is exempt from
registration under the Securities Act and applicable state securities laws; and
hereby agree to indemnify the Partnership and its partners, affiliates, agents,
employees and control persons, and hold each of them harmless against any and
all loss, damages, liability or expense, including reasonable attorney's fees,
which they or any of them may suffer, sustain or incur by reason of or in
connection with any misrepresentation or breach of warranty or agreement made by
the undersigned under this Investor Questionnaire or in connection with the sale
or distribution by the undersigned of the Units purchased by the undersigned
pursuant hereto in violation of the Securities Act or any other applicable law;
and
3. The person signing this Questionnaire on behalf of the Investing
Entity has been duly authorized to sign the Questionnaire on behalf of the
Investing Entity.
7. Other Certifications.
a. If by a Corporation:
By signing the Signature Page, the undersigned certifies the
following:
(A) that the Corporation's name, address of principal office,
place of incorporation and taxpayer identification number as
set forth in this Questionnaire are true, correct and
complete; and
(B) that one of the following is true and correct (check one):
[_] (i) the Corporation is a corporation organized in or
under the laws of the United States or any political
subdivision thereof.
[_] (ii) the Corporation is a corporation which is neither
created nor organized in or under the laws of the United
States or any political subdivision thereof, but which
has made an election under either Section 897(i) or
897(k) of the United States Internal Revenue Code of
1986, as amended, to be treated as a domestic corporation
for certain purposes of United States Federal income
taxation (A COPY OF THE INTERNAL REVENUE SERVICE
ACKNOWLEDGMENT OF THE UNDERSIGNED'S ELECTION MUST BE
ATTACHED TO THIS QUESTIONNAIRE IF THIS PROVISION IS
APPLICABLE).
[_] (iii) neither (i) nor (ii) above is true.
b. If by a Partnership:
By signing the Signature Page, the undersigned certifies on
behalf of such Partnership the following:
(A) that such Partnership's name, address of principal
office, place of formation and taxpayer identification
number as set forth in this Questionnaire are true,
correct and complete; and
(B) that one of the following is true and correct (check
one).
[_] (i) such Partnership is a partnership formed in or
under the laws of the United States or any political
subdivision thereof.
[_] (ii) such Partnership is not a partnership formed in
or under the laws of the United States or any
political subdivision thereof.
c. If by a Trust (other than a retirement related trust) or Estate:
By signing the Signature Page, the undersigned certifies on
behalf of such Trust or Estate the following:
(A) that such Trust's or Estate's purchase of the Units in within
the investment powers and authority of such Trust of Estate
(as set forth in the declaration of trust or other governing
instruments) and that all necessary consents, approvals and
authorizations for such purchase have been obtained and that
each person who signs the Signature Page has all requisite
power and authority as trustee or executor or administrator
to execute this Questionnaire and the Contribution Agreement
on behalf of such Trust or Estate;
(B) that such Trust has not been established in connection with
either (i) an employee benefit plan (as defined in Section
3(3) of ERISA), whether or not subject to the provisions of
Title I of ERISA, or (ii) a plan described in Section
4975(e)(i) of the Internal Revenue Code;
(C) that such Trust's or Estate's name, address of principal
office, place of formation and taxpayer identification number
as set forth in this Questionnaire are true, correct and
complete; and
(D) that one of the following is true and correct (check one):
[_] (i) such Trust is a trust whose income from sources
outside of the United States Federal tax purposes
regardless of its connection with a trade or business
carried on in the United States.
[_] (ii) such Trust is an estate or trust whose income from
sources outside of the United States Federal income tax
purposes regardless of its connection with a trade or
business carried on in the United States.
d. If by a Retirement Plan:
By signing the Signature Page, the undersigned on behalf of
such Retirement Plan certifies the following:
(A) that such Retirement Plan's governing documents duly
authorize the type of investment contemplated herein, and the
undersigned is authorized and empowered to make such
investment on behalf of such Retirement Plan.
_____________________________________________________________
(please print the exact name(s) and title in which
the Units should be issued)
(Investing Entity)
(Signature of Purchaser)
__________________________________________
(Name and Title Typed or Printed)
__________________________________________
(Name of Trustee(s) (if Trust))
__________________________________________
__________________________________________
(Date)
__________________________________________
EXHIBIT 7.2.1(P)
ESTOPPEL CERTIFICATE
To: CAPITAL AUTOMOTIVE REIT
0000 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, President and Chief Executive Officer
Re: Mortgagee's Interest and Mortgage Status in and of the Property owned
by ______________________________________________________
(the "The Contributor") and commonly known as ________________
(the "Property").
Gentlemen:
The undersigned ("Mortgagee") hereby certifies to CAPITAL AUTOMOTIVE
REIT (The "Company") and CAPITAL AUTOMOTIVE L.P. (the "Partnership") as follows:
(i) The certifications contained herein are being made with the
knowledge that the Company and the Partnership will place substantial reliance
thereon in connection with a major financial transaction involving, among other
maters, the acquisition of the Property, subject to Mortgagee's Interest and the
Mortgage, based upon the value of the Property as so subjected.
(ii) Mortgagee's interest in the property results from the lending to
the Contributor of a sum of money in the original principal amount of
$______________, upon the terms and conditions set forth in that certain
promissory note (the"Note"), an exact copy of which annexed hereto as Exhibit A.
The principal amount actually advanced under the note as of the date of this
certificate is $_____________, of which $_____________ is outstanding as of the
date of this certificate.
(iii) Mortgagee's entire interest in the Property ("Mortgagee's
Interest") is the security interest conferred by the security document annexed
hereto as Exhibit B and such other security instruments and filings as are
required by the terms of such document (collectively, the "Mortgage").
(iv) As of the date of this certificate there exists no default or
any condition or matter which, with the passage of time, could constitute a
default under or with respect to the Note or the Mortgage and there are not
prior defaults under the Note or the Mortgage which could become present or
future defaults if any presently outstanding waivers by the Mortgagee are
withdrawn.
(v) If the Note or Mortgage contains any "due on sale" or other
acceleration clause based upon change of ownership of the Property, the same
shall be deemed deleted if the Property is hereafter acquired by the Partnership
or the Company.
(vi) The undersigned has not assigned, sold or otherwise encumbered
its title to the Note, Mortgage or Mortgagee's interest and has full power and
authority to execute this certificate without the approval of any other person,
corporation or other entity.
IN WITNESS WHEREOF, the undersigned has executed this certificate
under seal this ____ day of ______________, 1997, intending the same to be a
sealed instrument of the Mortgagee.
_____________________
Mortgagee
ATTEST/WITNESS By:__________________(SEAL)
Title:_____________________
EXHIBIT 7.2.1(Q)
OPINION OF CONTRIBUTOR'S COUNSEL
Contributor's counsel shall deliver at Closing an opinion of counsel
regarding the matters set forth in Exhibit 7.2.2(f) as applicable to the
Contributors, in form and substance reasonably acceptable to the Company and the
Partnership.
EXHIBIT 7.2.2(F)
OPINION OF XXXXXX, XXXXXX & XXXXXXXXX TO BE DELIVERED AT CLOSING:
1. The Company is a corporation duly organized or formed, validly existing and
in good standing under the laws of the State of Delaware.
2. The Partnership is a limited partnership duly organized or formed, validly
existing and in good standing under the laws of the State of Maryland.
3. Each of the Company and the Partnership has the requisite corporate or
partnership power (respectively) to execute and deliver, and to perform its
obligations under, the Agreement.
4. The general partner of the Partnership has the requisite partnership power
and authority to carry on its business and to execute an deliver, and to perform
its obligations under, the Agreement and to execute and deliver on behalf of
such Partnership, and to bind the Partnership to, the Agreement.
5. The execution and delivery by each of the Comapny and the Partnership has
been duly authorized by all necessary corporate or partnership actions
(respectively).
6. The execution, delivery and performance of the Agreement by the general
partner of the Partnership on behalf of the Partnership have been duly
authorized by all necessary partnership actions, and the individuals executing
the Agreement on behalf of such general partner have been duly authorized to do
so.
7. The execution, delivery and performance by the Company will not violate the
charter or bylaws of the Company.
8. The execution, delivery and performance by the general partner of the
Partnership, and such general partner's performance of its obligations under,
the Agreement on behalf of the Partnership will not violate the Partnerships
Organizational Documents.
9. The Agreement has been duly executed and delivered by each of the
Partnership and the Company and is the legal, valid and binding obligation of
each, enforceable against each in accordance with its terms.
SCHEDULE I
CONTRIBUTORS' NAMES AND ADDRESSES
----------------------------------------------------------------------------------------------------
Name Property Numbers from Schedule 1.2 Address
----------------------------------------------------------------------------------------------------
1. Xxxxxx Investments Two, LC 1 0000 Xxxx Xxxx
Xxxxxxxx, Xx. 00000
----------------------------------------------------------------------------------------------------
2. Xxxxxx Investments One 2 00000 Xxxxxxxxx Xxxxx Xxx.
Limited Partnership Woodbridge, Va. 22191
3 0000 Xxxxxxxx Xx.
Xxxxxxxxxxx, Xx. 00000
----------------------------------------------------------------------------------------------------
3. Xxxxxxx X. Xxxxxx and 4 9371 Roosevelt Blvd.
Xxxxx X. Xxxxxx Philadelphia, Pa. 19114
----------------------------------------------------------------------------------------------------
SCHEDULE 1.2
OWNERSHIP INTERESTS IN PROPERTIES AND CONTRIBUTION AMOUNTS
-------------------------------------------------------------------------------------------------------------------------
Property Contribution
Number Contributor Tax Account Number Property Address Amount
-------------------------------------------------------------------------------------------------------------------------
1 Xxxxxx Investments Two, LC 00-0000000 - Parcel A 0000 Xxxx Xx. $2,132,000
00-0000000 - Parcel 3 Xxxxxx Heights, Md. 20706
00-0000000 - Parcel 53
-------------------------------------------------------------------------------------------------------------------------
2 Xxxxxx Investments One Limited Partnership 029-01-000-0038F1 00000 Xxxxxxxxx Xxxxx Xxx. $2,565,925
Woodbridge, Va. 22191
-------------------------------------------------------------------------------------------------------------------------
3 Xxxxxx Investments One Limited Partnership 090-2-01-00-0051-A 0000 Xxxxxxxx Xx. $6,308,000
090-2-01-00-0053 Xxxxxxxxxxx, Xx. 00000
090-2-01-00-0054
090-2-01-00-0055
090-2-01-00-0057-D
-------------------------------------------------------------------------------------------------------------------------
4 Xxxxxxx X. Xxxxxx and Xxxxx X. Xxxxxx 00-0000000 0000 Xxxxxxxxx Xxxx. $3,000,000
Xxxxxxxxxxxx, Xx. 00000
-------------------------------------------------------------------------------------------------------------------------
SCHEDULE 1.3(A)
SCHEDULE OF UNITS ISSUED IN CONSIDERATION FOR EACH PROPERTY
Each Contributor will receive a number of Units that is equal to the
Contribution Value of the Property contributed by such Contributor as determined
by application of the formula set forth in Section 1.3 of the Agreement (as
further adjusted pursuant to Section 2.1, if applicable).
SCHEDULE 1.3(B)
MORTGAGE INDEBTEDNESS
Property/Parcel Name of Borrower Lender Outstanding Maturity Date Prepayment
-------------- ---------------- ------ Principal on ------------- Rght
November 1, ----------
1997/at Closing
Date
---------------
---------------------------------------------------------------------------------------------------------------
5201 Auth Rd. Xxxxxx Investments Two, Vinco, Inc. $1,100,000/ Yes
Xxxxxx Heights, Md. 20706 LC (To be
determined on
Closing Date)
---------------------------------------------------------------------------------------------------------------
00000 Xxxxxxxxx Xxxxx Xxx. Xxxxxx Investments One Ford $1,439,702/ Yes
Xxxxxxxxxx, Xx. 00000 Limited Partnership Motor (To be
Credit determined on
Closing Date)
Vinco, Inc. $200,000/ (To
be determined
on Closing
Date)
---------------------------------------------------------------------------------------------------------------
0000 Xxxxxxxx Xx. Xxxxxx Investments One Ford $3,846,367/ Yes
Xxxxxxxxxxx, Xx. 00000 Limited Partnership Motor (To be
Credit determined on
Closing Date)
$200,000/ (To
Vinco, Inc. be determined
on Closing
Date
---------------------------------------------------------------------------------------------------------------
0000 Xxxxxxxxx Xxxx. Xxxxxxx X. Xxxxxx and Ford $2,857,610/(To
Xxxxxxxxxxxx, Xx. 00000 Xxxxx X. Xxxxxx Motor be determined
Credit on Closing
Date)
---------------------------------------------------------------------------------------------------------------
SCHEDULE 4.1
PRIOR OCCUPANTS
Property Number
1. Lessee: Xxxxxx Ford, Inc.
2. Lessee: Xxxxxx Lincoln Mercury, Inc.
3. Lessee: Xxxxxx Ford of Springfield, Inc.
4. Lessee: Sheehy, Ford, Inc.
SCHEDULE 4.4(B)
GUARANTIES
None.
SCHEDULE 5.1
SCHEDULED EXCEPTIONS
Any disclosures required by this Schedule 5.1 shall be inserted hereon after the
execution of this Agreement according to Sections 5.1, 5.2 and 5.3 of the
Agreement.
SCHEDULE 9.6
MATERIAL DEFAULTS
Any disclosures required by this Schedule 9.6 shall be inserted hereon after the
execution of the Agreement according to Section 7.3.12 of the Agreement.
SCHEDULE 9.13
ZONING
Property Number from Schedule 1.2 Parcel Zoning Classification
--------------------------------- ------ ---------------------
1 06-0422113- Parcel A CM
00-0000000 - Parcel C-7
00-0000000 - Parcel 53 C-7
2 029-01-000-0038F1 B-1
3 090-2-01-00--0051-A C-8
090-2-01-00-0053 C-7
090-2-01-00-0054 C-7
090-2-01-00-0055 C-7
090-2-01-00-0057-D C-7
4 88-21740000 C-3
SCHEDULE 9.15.5(A)
THE TREATMENT, STORAGE AND DISPOSAL LOCATIONS FOR SUBSTANCES OF CONCERN
Any disclosures required by this Schedule 9.15.5(a) shall be inserted hereon
after the execution of the Agreement according to Section 7.3.12 of the
Agreement.
SCHEDULE 9.15.5(B)
STORAGE TANKS
The disclosures required by this Schedule 9.15.5(b) shall be inserted hereon
after the execution of the Agreement according to Section 7.3.12 of the
Agreement.
SCHEDULE 9.15.5(C)
EXISTENCE OF ASBESTOS
The disclosures required by this Schedule 9.15.5(c) shall be inserted hereon
after the execution of the Agreement according to Section 7.3.12 of the
Agreement.
SCHEDULE 9.15.5(F)
ENVIRONMENTAL PERMITS AND AUTHORIZATIONS
The disclosures required by this Schedule 9.15.5(f) shall be inserted hereon
after the execution of the Agreement according to Section 7.3.12 of the
Agreement.
SCHEDULE 9.16
INSURANCE
The disclosures required by this Schedule 9.16 shall be inserted hereon after
the execution of the Agreement according to Section 7.3.12 of the Agreement.
SCHEDULE 9.19
LEASE DISCLOSURES
Any disclosures required by this Schedule 9.19 shall be inserted hereon after
the execution of the Agreement according to Section 7.3.12 of the Agreement.
SCHEDULE 9.19.2
LEASES AND RENT ROLLS
1. PROPERTY 1 (FROM SCHEDULE 1.2):
Lessors: Xxxxxx Investments Two, LC
Lessee: Xxxxxx Ford, Inc.
Annual Rent: $126,000
2. PROPERTY 2 (FROM SCHEDULE 1.2)
Lessor: Xxxxxx Investments One Limited Parntership
Lessee: Xxxxxx Lincoln Mercury, Inc.
Annual Rent: $243,110
3. PROPERTY 3 (FROM SCHEDULE 1.2)
Lessor: Xxxxxx Investments One Limited Partnership
Lessee: Xxxxxx Ford of Springfield, Inc.
Annual Rent: $626,008
4. PROPERTY 4 (FROM SCHEDULE 1.2)
Lessor: Xxxxxx Ford, Inc.
Lessee: Xxxxxxx X. Xxxxxx and Xxxxx X. Xxxxxx
Annual Rent: $320,000
SCHEDULE 9.19.13
OTHER LANDLORDS
Any disclosures required by this Schedule 9.19.13 shall be inserted hereon after
the execution of the Agreement according to Section 7.3.12 of the Agreement.
SCHEDULE 9.20(A)
SERVICE CONTRACTS
The disclosures required by this Schedule 9.20(a) shall be inserted hereon after
the execution of the Agreement according to Section 7.3.12 of the Agreement.
SCHEDULE 9.20(B)
MANAGEMENT CONTRACTS
The disclosures required by this Schedule 9.20(b) shall be inserted hereon after
the execution of the Agreement according to Section 7.3.12 of the Agreement.
SCHEDULE 9.23
LIABILITIES OF CONTRIBUTORS
1. Debtor: Xxxxxx Investments One Limited Partnership
Creditor: Vinco, Inc.
Amount: $200,000
Property: #2
2. Debtor: Xxxxxx Investments One Limited Partnership
Creditor: Vinco, Inc.
Amount: $200,000
Property: #3
SCHEDULE 9.24
CONTRACTS
The disclosures required by this Schedule 9.24 shall be inserted hereon after
the execution of the Agreement according to Section 7.3.12 of the Agreement.
SCHEDULE 9.26
EMPLOYEE BENEFIT PLANS/EMPLOYMENT CONTRACTS/EMPLOYEE BENEFIT LIABILITIES
The disclosures required by this Schedule 9.26 shall be inserted hereon after
the execution of the Agreement according to Section 7.3.12 of the Agreement.
SCHEDULE 12.1.5
RESTRICTIONS ON SALE AND/OR FINANCING OF SPECIFIED PROPERTIES
Property Number from Schedule 1.2 Lock-Out Period for Sale and Financing
--------------------------------- --------------------------------------
1 4 years
2 4 years
3 5 years
4 7 years
SCHEDULE 12.4.5
LIMITATIONS ON INDEBTEDNESS
Contributor Tax Property Tax Basis Mortgage Debt to be
Account Address Balance Maintained
Number
--------------------------------------------------------------------------------
Xxxxxxx X. 88-217400 9371 Rossevelt $560,000 $2,857,610 $2,300,000
Xxxxxx and Blvd.
Xxxxx X. Xxxxxx Philadelphia, PA
---------------------------------
TOTALS $560,000 $2,857,610 $2,300,000
SCHEDULE 14.2.1
INDEMNITORS
None.
CAPITAL AUTOMOTIVE REIT
0000 Xxxxx Xxxx Xxxxxx, #000
Xxxxxxxxx, Xxxxxxxx 00000
November 24, 1997
Xx. Xxxxxxx X. Xxxxxx
Xxxxxx Auto Group
00000 Xxxx Xxxx Xxxxxx
Xxxxxxx, XX 00000
Re: Contribution Agreement
Dear Xx. Xxxxxx:
This letter confirms the agreement of the undersigned entities and you with
respect to the Lease Agreement (the "Lease Agreement") to be entered into
pursuant to the Agreement for Contribution of Interests dated November 24, 1997,
between us and you (the "Contribution Agreement"). All capitalized terms not
defined herein shall have the meanings assigned to them in the Lease Agreement.
1. We agree that the requirement to pay a Security Deposit as required
pursuant to Section 2.03 of the Lease Agreement is hereby irrevocably waived.
2. We agree that the deposit of Impositions pursuant to Section 3.04 of
the Leases is hereby irrevocably waived.
3. If the Landlord decides to sell the Loisdale Road, Springfield,
Virginia property then in addition to the procedures of Section 16.01(a), we
will notify you of the proposed purchase price of the Leased Properties and the
parties agree to negotiate in good faith concerning a sale of such property to
you. If we are unable to reach agreement, we will have the right for a period
of one year to sell such property to a third party for a purchase price greater
than or equal to One Hundred Ten Percent (110%) of the purchase price proposed
by us.
4. In the event of a proposed assignment by Tenant of the Lease that is
consented to by Landlord or as to which the conditions imposed by Landlord have
been complied with, then Tenant shall cease to have any obligations or liability
under the Lease.
Xx. Xxxxxxx X. Xxxxxx
Xxxxxx Auto Group
November 24, 1997
Page 2
We acknowledge that you would not enter into the Contribution Agreement
dated November 24, 1997, between us and you, if we had not agreed to the terms
of this letter. This letter shall be binding upon us and our successors and
assigns.
CAPITAL AUTOMOTIVE, L.P.
a Delaware limited partnership
By: CAPITAL AUTOMOTIVE REIT,
a Maryland real estate
investment trust,
its General Partner
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: President
Accepted and agreed this
24th day of November, 1997:
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
